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Congress to once again consider extension of key renewable energy program

A measure to extend the 1603 Treasury Program, one of the most successful solar incentives of the last few years, will face a vote in the Senate tomorrow.

Senator Debbie Stabenow (D-MI) introduced an amendment to extend the Section 1603 Treasury Grant for one year as part of the highway bill (S. 1813) currently under consideration in Congress.

Covering not only solar, but also cellulosic biofuel, biodiesel and renewable diesel, the 1603 program reimburses companies for up to 30 percent of the cost of renewable energy installations in lieu of tax credits. Introduced in the 2009 stimulus package, Section 1603 was extended in 2010, but expired at the end of 2011.

Section 1603 Stabenow’s amendment also includes a one-year extension of the Production Tax Credit that has contributed to the growth of the wind industry.

Solar industry players have touted the 1603 program as a key driver of industry growth, and argue that discontinuing the program will decrease available financing for energy projects by 52 percent in 2012, while a year-long extension will create an additional 37,000 jobs in the solar industry alone.

“These entrepreneurs are inventing new technology, hiring workers, and producing cutting-edge new products that save consumers money and reduce our dependence on foreign oil,” said Senator Stabenow. “Especially when gas prices are rising, we shouldn’t be raising taxes on innovators and job creators who are helping to lower America’s energy bills.”


Senator Stabenow. Photo Credit: AP Photo/Pablo Martinez Monsivais


Back in February, Congress passed a bill extending payroll tax cuts and unemployment benefits until the end of 2012. Solar industry stakeholders had hoped that an extension of the 1603 Treasury program would also be included in the bill. But the 1603 program extension failed to pass.

At the time, Rhone Resch, president and CEO of the Solar Energy Industries Association, expressed disappointment. “While larger energy developers have the scale and resources to receive tax equity from Wall Street, small businesses don’t and are hurt most by Congress’ inaction,” he said.

“Small businesses are the engine of economic growth in America, and the result of a continued lapse of the 1603 program will be job losses and undue economic hardship for the entrepreneurs we are relying on to create jobs and get our economy back in order.”

But despite support from the Obama administration – an extension of the program was included in the President’s budget for 2013 — whether 1603 will be extended this time is uncertain.

The Senate is set to vote on the 30 amendments to the bill tomorrow, and Stabenow’s amendment needs 60 votes to pass. Since the Democrats only have 51 members in the Senate, the bill would need some Republican support. And among the other amendments up for vote are measures by Republicans to kill energy tax credits.  

According to Renewable Energy World, Timothy Arcuri, a research analyst with CitiGroup, said that his Capitol Hill sources believe it is unlikely enough Republicans would sign onto the current version of the legislation. Further, the House highway bill differs significantly from the Senate bill, making it unlikely that the Senate bill will pass in its current form.

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