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Obama’s budget requests extension of key solar program

President Obama’s proposed fiscal year 2013 budget, which he outlined yesterday, included several key requests in support of solar.

The budget proposes a 3.2 percent increase in discretionary funds for the Department of Energy, which the official budget calls “a testament to the importance of innovation and clean energy to the country’s economic future.”

The energy strategy is described as one “that emphasizes priorities in clean energy and advanced manufacturing, through grants, financing assistance, and tax incentives that accelerate fundamental research, technology development, and commercialization.”


Photo Credit: Heritage Foundation


This DOE funding includes $2.3 billion for the Office of Energy Efficiency and Renewable Energy (EERE), with an almost doubling in funding for energy efficiency activities.

Also included is an increase in funding – up to $350 million – for the Advanced Research Projects Agency–Energy, which focuses on pioneering energy research. The SunShot Initiative, which aims to lower the cost of solar energy to be competitive with conventional energy sources by the end of the decade, will continue with $310 million in support.

The proposed budget also eliminates four billion dollars of annual fossil fuel subsidies that “impede investment in clean energy sources and undermine efforts to address the threat of climate change.” In strong language, the document argues that “we should not devote scarce resources to subsidizing the use of fossil fuels produced by some of the largest, most profitable companies in the world.”

“These investments in high-performing programs will help position the United States as a world leader in the clean energy economy, and create the foundation for new industries and new jobs,” said the proposed budget.

Key Program Extension

A key request is the extension of the Treasury 1603 Program, which reimburses companies for up to 30 percent of the cost of renewable energy installations in lieu of tax credits. Part of the 2009 stimulus package, Treasury 1603 was extended in 2010, but expired at the end of 2011.

“The lapse of the 1603 Program at the end of last year has had a detrimental impact. Small businesses and entrepreneurs who typically use this program and who would otherwise be hiring workers and starting new solar projects have been left in limbo,” said Rhone Resch, President and CEO of the Solar Energy Industries Association (SEIA).

“America’s solar industry appreciates President Obama’s support for extending the 1603 Treasury Program,” he said.

The budget does not request for further funding for the Department of Energy’s loan guarantee program, made famous by Solyndra’s bankruptcy, only $38 million to administer the loans currently in the portfolio.

With almost no chance of enactment, the budget may be merely the President’s blueprint for FY2013 expenditures. However, the sign of support from the administration has been well-received by solar industry players.

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