National Press Club

Solar leaders advocate extension of cash grants

December 15, 2011 | By Lorna Aldrich | Lorna2@verizon.net

Solar Energy Industries Association (SEIA) Newsmaker. (l-r) Joe Desmond, senior vice president, Brightsource Energy; Tony Clifford, chief executive, Standard Solar; Shayle Kahn, managing director, GTM Research; Rhone Resch, president and chief executive, SEIA; moderator Frank Maisano, Bracewell & Giuliani LLP.

Solar Energy Industries Association (SEIA) Newsmaker. (l-r) Joe Desmond, senior vice president, Brightsource Energy; Tony Clifford, chief executive, Standard Solar; Shayle Kahn, managing director, GTM Research; Rhone Resch, president and chief executive, SEIA; moderator Frank Maisano, Bracewell & Giuliani LLP.

Photo/Image: Rodrigo A.-Valderrama

Leaders from solar energy companies advocated extension of a cash grant program for renewable energy projects that is scheduled to expire at year end during a Dec. 14 Newsmaker.

The program, formally known as Section 1603, provides cash grants to renewable energy initiatives in lieu of tax credits.

The Solar Energy Industries Association (SEIA) predicts that 37,000 jobs would be created from a one-year extension of the program. SEIA estimates that 100,000 people work in the solar industry, which grew 69 percent over the past year.

"Section 1603 is a solar success story," said Tony Clifford, chief executive of Standard Solar, a local Maryland installer and developer.

His company grew from three employees in 2007 to 100 in 2011. He warned that lapse of Section 1603 would prevent them from making the 12 new hires planned for 2012.

Many of the 5,000 companies in the solar industry are small businesses like his own, according to Clifford. He said the average grant under the 1603 program is less than $500,000.

Rhone Resch, president and chief executive of SEIA, said many of those employed in the solar industry are those laid off from the housing industry.

Since the program was initiated in 2008, "the scale of the market has grown eightfold," he said.

Resch called the 1603 program "the most important program for expanding the use of renewable energy in our country."

Shayle Kann of GTM Research summarized the "U.S. Solar Market Insight" study for the third quarter of 2011. He reported 39 percent growth of the industry from the second to third quarter of 2011 and 140 percent growth over third quarter of 2010.

Residential, commercial and utility markets grew as well nationwide. He said declining prices for inputs because of global oversupply have contributed to U.S. growth. He said that growth in 2012 was uncertain, depending on the fate of 1603.

Many renewable energy companies have tax bills smaller than the investment tax credits, Joseph Desmond of Brightsource Energy explained.

Before the 2008 downturn, they could enter partnerships with other companies whose tax bills were large enough to benefit. The partners could give the energy company the value of the tax credit.

The number of companies offering such partnerships plummeted after 2008, and the 1603 program was enacted to provide direct benefits to renewable energy companies.

Several speakers said that the 1603 program is not "new money," but a mechanism to replace tax credits that are no longer viable.