Last August, when state energy regulators in California green-lighted the first large-scale solar thermal power plant in two decades, they kicked off what renewable energy backers said would be a solar boom, bringing jobs and revenue to the fiscally troubled state. The California Energy Commission's approval of the Beacon Solar Energy project wasn't the only development milestone for big solar development this summer. Five other projects have reached the home stretch of approval by the U.S. Bureau of Land Management. But while those projects and others have cleared regulatory hurdles, they're also facing a major roadblock � the expiration at the end of this year of a federal programme that would pick up the tab for almost one-third of each project's costs. Now, urged on by national renewable energy advocates, a bipartisan group of federal lawmakers is pushing to extend the programme for two years, a move they say would spark billions of dollars in investment and create thousands of jobs, but election season politics and a crowded legislative calendar make passage uncertain. The U.S. Treasury cash grant programme was introduced in 2009 as part of the American Recovery and Reinvestment Act as a way to compensate for the absence of investors interested in renewable energy projects in the aftermath of the housing mortgage meltdown. Before the financial crisis, investors would support projects with cash in return for the tax credits clean energy projects could generate. But these tax equity investors, walloped by the economic downturn, closed their wallets. Administered jointly by the U.S. Treasury and the Department of Energy, the grant programme allows renewable energy project developers to receive a 30% cash grant in lieu of tax credits. "The grant helps by bringing down the costs of these projects, so they're cheaper to build," Solar Energy Industries Association spokeswoman Monique Hanis said. The programme is meeting its goal of jumpstarting new renewable projects, according to a preliminary assessment of the programme released in April by the Lawrence Berkeley National Lab. The report estimated that in 2009, the program spurred development of more than 2,400 megawatts of wind power that would not have otherwise been built, which resulted in more than 55,000 short- and long-term jobs being created. In the solar sector, projects built since the grant programme's launch have supported more than 15,000 direct and indirect jobs, according to the Solar Energy Industries Association, a national trade organisation that is among the groups pushing for an extension of the programme. As of September, the grant program had directed $5.2 billion to more than 1,110 projects nationwide. About 80% of those projects were solar installations, though wind projects have received almost 90% of the total dollars spent by the programme thus far. However, to be eligible for the grant programme, projects must begin construction by the end of 2010. Most of the solar projects that have benefited from the grant programme so far are small projects�the challenge is in the larger projects, especially in permitting and project financing, Hanis said.


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