U.S. Senators want to extend treasury cash grant program

Stillwater geothermal power plant of Enel, Nevada, (source: nbmg.unr.edu)

Alexander Richter 18 Jun 2010

“A group of U.S. Senators wants to extend the Clean Energy Treasury Grant Program (TGP) through the end of 2012.”, so recent news from the U.S.

According to this article, “U.S. Senator Maria Cantwell (D-WA) along with co-sponsors Senators George LeMieux (R-FL), Dianne Feinstein (D-CA), Debbie Stabenow (D-MI), Jeff Merkley (D-OR), and Ben Nelson (D-NE) proposed an amendment to the pending “tax extenders” bill.

Set to expire at the end of this year, the Treasury Grant Program was created as part of the American Recovery and Reinvestment Act of 2009. The program provides cash grants in lieu of tax credits for renewable energy projects. It is often credited with pulling the renewable energy industry through the toughest part of the economic recession.

The economic meltdown has prevented utilities from using production and investment tax credits for clean-energy development. Extending the TGP now would prevent a slow-down in the rate of project development in anticipation of its impending expiration.

The amendment also would make non-profit power producers eligible for the TGP. These non-tax-paying public power producers and rural electric co-ops, which serve over 25% of Americans, are currently excluded from receiving grants under the program.

“The evidence is clear that the Treasury Grant Program is one of the most successful in the entire 2009 stimulus bill in terms of incentivizing industry to invest in renewable energy alternatives,” Senator Cantwell said.

Prior to the economic downturn, clean energy developers relied on ‘tax equity partnerships’ with Wall Street to take advantage of clean-energy tax incentives. Under this system, the banks often kept about a third to half of the value of these U.S. taxpayer-funded incentives. In 2008, the financial crisis froze the $8 billion ‘tax equity’ market, jeopardizing billions of dollars in clean energy investment. The Treasury Grant Program proved an effective replacement for these partnerships and provided a much more direct and effective use of clean energy tax incentives.

Senator Feinstein said: “The Recovery Act grant program run by the Treasury Department has proven to be one of the most successful steps we’ve taken to encourage investment in this sector. So far, the program has helped to bring 4,250 megawatts of clean power online and is expected to generate more than 143,000 green jobs by the end of the year, according to the Lawrence Berkeley National Laboratory.”

A May 2010 study by EuPD Research found that a two-year TGP extension would create nearly 65,000 solar jobs in that sector alone. and would result in enough additional solar generation to power more than 1.2 million homes.

The bipartisan amendment is still being scored by the Joint Committee on Taxation, but the cost is anticipated to be minimal and more than offset by ending the ability for oil companies that have revenues over $100 million a year to count their contributions to the Oil Spill Liability Trust Fund as a business expense that they can use to reduce their corporate tax liabilities.

The amendment is supported by the American Wind Energy Association, Geothermal Energy Association, National Hydropower Association, Solar Energy Industries Association, Large Public Power Council, National Rural Electric Cooperative Association and others.”

Source: Sustainable Business