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Another Year in the Sun for Tax Grant Program 1603?

Extension of an $858-billion tax credit package, including the suite of renewable energy tax cuts and grants outlined in Department of Treasury Section 1603 tax grant program, could happen as soon as today as the House of Representatives gets its hands on the Senate’s bill which passed on Dec. 15.

Renewable energy industry insiders consider US Tax Grant Program (TGP) 1603, which subsidizes about 30% of the new facility costs for renewable energy projects, the most powerful force behind 2010 growth: “Since its passage, the 1603 program has successfully created jobs and opportunity in all 50 states for construction workers, electricians, plumbers, contractors that have struggled during this difficult economic climate. An extension will help the solar industry remain one of the fastest growing industries in America,” said Rhone Resch the CEO of the Solar Energy Industries Association (SEIA) in a statement.

According to SEIA’s web site, the TGP triggered more than 1,100 solar projects in 42 states and supported $18 billion in investment, allowing the solar industry to grow by more than 100 percent in 2010, create enough new solar capacity to power 200,000 homes, and provide jobs for 93,000 Americans.

Denise Bode, the CEO of the American Wind Energy Association (AWEA), said in a statement that the tax breaks are important to long-term growth to wind, too: “With consistent policies like this one, wind energy can generate 20 percent of America’s electricity within 20 years, and employ half a million Americans.”

The bill includes a provision to revive the $1/gal biodiesel tax credit, which expired in 2009, but would take effect retroactively from the start of 2010 and last through 2011.

It also resurrects a $0.50/gal tax credit for companies using liquefied natural gas, liquefied coal and other alternative fuels

Ethanol would maintain its own sweet breaks, $0.45/gal credit for blenders to add ethanol to their gasoline mixes, and a $0.54/gal tariff on imported ethanol. Sen. Dianne Feinstein (D-Calif.), said in a statement following the Senate vote, that she would seek to reduce ethanol credits when the new Congress convenes in January.

“The ethanol industry is the only one to ever receive the triple crown of government intervention. Ethanol use is mandated by law, its users receive federal subsidizes and domestic production is protected by tariffs. That policy is not sustainable,” Feinstein said.

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5 thoughts on “Another Year in the Sun for Tax Grant Program 1603?

  1. They should raise it to 75% !!!!!!!!! Why don’t we stop the tax breaks for the oil industry and give them to the renewable world? That’s like subsidizing a fish to swim…how stupid are we??? Sorry, not us…our stupid, paid-off elected officials…

  2. They also need to extend it by many years, not just one. One of the key obstacles to significantly larger investments in renewables by businesses, financiers, and the like is the short horizons of many federal incentive programs. Businesses plan ahead in multi-year increments, and single-year extensions don’t give them enough confidence to proceed ahead with large scale deployments.

  3. What happened to all the credits and tax benefits the sustainable packaging industry were going to garner? Again politics control how our enviroment is or is not going to continually be poisened (cap&trade).

  4. The Grants are NOT the solution. They just continue the status-quo of large, monopolistic management of our national energy system. Further, it places an ever increasing burden on the grid forcing the early deployment of new and very expensive infrastructure to move the energy from these multi megawatt, variable-availability sources to the millions of regionally diverse kilowatt loads. Wrong answer!

    when it comes to the deployment of renewable energy systems our current plans are not financially nor technically viable. Given the current economic climate we will be hard pressed to find consumers or companies willing to make the kind of financial investment required to go solar/wind especially when the ROI is on the order of 20 to 40 years. Yes I said years not months.

    All the cap and trade concepts, CO2 taxes, and do-it-for-the-environment best wishes do not alter the laws of physics and finance. When consumer confidence is at an all time low, personal wealth has been cut in 1/2 within the last year, real estate holdings are worthless, unemployment is sky rocketing, profits are tumbling, and the forecasts are bleak at best it takes a very wealthy or carefree individual to invest in renewable energy systems with almost zero payback potential.

    But that is no reason to give up. No – instead we must rise to occasion as President Obama has asked and deal with these challenges head on. To that end I offer my services as a leading expert in the field of energy systems, generation, distribution, storage, and conversion. And I have outlined below some basic proposals that must be addressed if we are ever to have a viable alternative energy system in America.

    One other comment – we need an oversight panel, to which I nominate myself, to ensure that the renewable energy industry is not price gouging Americans. It appears from recent market surveys that the solar PV industry is not dropping the installed cost nearly as fast as the rate of commodity; PV, inverter, and installation/labor rates are declining. In fact in many markets they are raising prices. So the tax payer and utilities are paying the price and not reaping the rewards of a growing market.

    In order to make consumer/residential level solar PV financially viable we need a national policy that:

    1. Establishes a fixed rebate schedule of $5 per watt declining 1 for 2 based upon a total installed cost starting at $10 per watt. (i.e. – $8/W installed nets a $4/W rebate)
    2. All solar PV installations are exempt from sales tax
    3. All solar PV installations are excluded from the building property tax basis
    4. Establish a local – State, County, City, Municipal ten-year bond funding program for Solar PV, Wind, small-scale Hydro, and Natural Gas refueling infrastructure with bonds being sold at 4% and funds made available at 5%. (this provides a positive cash flow to the agency for a change!)
    5. Enable all such funds used in 4 above to be repaid via a ten-year property tax levy on the property where the assets are permanently attached.

    Without the above there is no way we will see a million rooftops of PV in less than 10 years

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