On November 30, a group of over 750 firms, small businesses and organizations sent a letter to Congressional leaders asking to extend a Treasury Department program that supports renewable energies.
The 1603 Program reimburses companies for a part of the cost of renewable energy installations. The payments are received in lieu of tax credits. But the program is set to expire at the end of the year.
The 764 groups calling for Treasury 1603’s renewal cited a July 2011 survey by the U.S. Partnership for Renewable Energy Finance estimating that ending the program would decrease financing available for energy projects by 52 percent over the next year.
“The 1603 program was the single biggest driver of renewable energy deployment over the last two years, leveraging nearly $23 billion of private sector funding,” said Rhone Resch, President and CEO of SEIA.
“Allowing it to expire at the end of the year, while tax equity markets remain limited, would have a severe impact on the few industries actually creating new American jobs in this economy,” he continued.
A study by SEIA and EuPD research back in October found that extending the program for one year will create an additional 37,000 jobs in the U.S. solar industry. These additions would continue the impressive growth of employment in the solar sector. While the economy as a whole has seen unemployment hovering around 9 percent, the solar industry saw an increase of jobs of almost 7 percent between August 2010 and August 2011.
The letter said the program is an “efficient finance mechanism” that provides a way to “maximize the return and value of existing energy tax incentives, and is technology neutral so it encourages the development of a wide variety of domestic energy technologies.”
Members of Congress have yet to show any indication of whether they will consider extending the program. But in an interview with Bloomberg, Christine Tezak, a Robert W. Baird & Co. analyst in McLean, Virginia, said that despite support in Congress, the chances of finding funding for the extension are “extraordinarily low.”
Also speaking to Bloomberg, Marshal Salant, managing director of Citigroup Global Markets Inc., said that “in a year like this, where everyone is so focused on the budget, we worry that it unfortunately will be difficult for 1603 to get extended.”
“There’s just no way we can compensate for the cash grants if they go away,” he continued.