Barack Obama, President Obama — January 3, 2011 at 11:37 am

Another lame duck victory you probably missed


In the flurry of activity of the 111th Congress lame duck session, a nice piece of progressive legislation passed with little notice or fanfare. But it’s a BFD for renewable energy.

As part of the tax cut deal negotiated by President Obama with the Republicans, a key section of the American Recovery and Reinvestment Act (ARRA), Section 1603, was extended. Why is this important? Because section 1603 of the ARRA gives a very tidy tax credit to companies investing in solar and wind energy installations. It authorizes the Department of the Treasury to issue grants (to cover 30 percent of the clean energy project costs), in lieu of issuing clean energy production tax credits or investment tax credits, to investors in clean energy facilities that became operational or commenced construction before the end of 2011.

Shortly before midnight on Dec. 16, the U.S. House approved the passage of a tax bill that includes a one-year extension of the grant program. The program was created by the American Recovery and Reinvestment Act (Section 1603) to provide commercial solar installations with a cash grant in lieu of the 30 percent solar investment tax credit (ITC). The extension was heralded by groups like the Solar Energy Industries Association (SEIA) and the American Wind Energy Association (AWEA).

“It took a year of tireless effort from the entire solar industry and our champions in Congress to get an extension of the 1603 program,” said Rhone Resch, CEO of SEIA.

“The inclusion of renewable energy in the tax bill is a clear indication of strong bipartisan support for the wind industry,” said Denise Bode, CEO of AWEA.

As pointed out by Eric Wesoff at Greentechmedia, this truly is a BFD:

Industry reaction has been overwhelmingly positive.

“This has been a monumental week on the policy front for renewable energy,” said Marie Schnitzer, director of solar services at AWS Truepower. “Four major announcements — from the extension of the Treasury Grant program and the approval of California’s first feed-in-tariff, to the DOE-DOI announcement regarding public land suited for solar, and the California Air Resources Board’s movement to implement cap and trade in California — all have the power to generate meaningful market opportunity for renewables and drive record wind and solar adoption in 2011.”


The United States Tax Grant Program (TGP), also known as 1603, has been the main driver for the strong growth of solar in the U.S. in 2010. To date, 1,179 solar projects with total investments of over $1.3 billion in 42 states have been built with support from this program.

According to Rhone Resch, the CEO of the Solar Energy Industries Association (SEIA), 1603 has leveraged $18 billion in renewable energy projects for “an incredible return on the taxpayer dollar.” He added that 1603 is “simply the most important policy for continuing renewable energy growth in the U.S.”

These types of victories in the lame duck were crucial because the chance of this type of progressive legislation getting to the President’s desk between now and 2013 is infinitesimal with the Republicans takeover of the House. They will spend the next two years trying to unravel any progress made on the progressive agenda so securing these things in 2010 was essential. And it got done because President Obama was willing to compromise.

UPDATE: I just happen to be reading an article in Chemical and Engineering News, the weekly publication of the American Chemical society, titled “Chemistry Energizes China”. Here are some choice quotes about their investment in renewables we should all read:

“I don’t think I could have implemented this [$60 million] project in the U.S. But in China, when they trust the management team, the investors will put the money down – and quickly”

— Philip Liu, entrepreneur from Arizona, founder of AuraSource

“I think it’s safe to say that China is sometimes bolder in its initiatives, and China is faster.”

— Wieguang Yao, Chief Technology Officer, Dow Chemical Asia-Pacific

[In 2009] China led the world in clean technology investments.”

— Pew Charitable Trusts report

“Chinese energy generation is a big deal for us.”

— Jeremy Burks, president of Dow Corning Greater China

“We see the U.S. as an emerging market and China as the established market… The Chinese market is several times bigger than the U.S. one “

— Edward Frindt, CEO of Ohio-based Novolyte Technologies

“The large-scale adoption of cellulosic biofuels in China could create 6 million jobs.”

— Michael Christiansen, president of Novozymes China

“There’s a lot of activity sponsored by the Chinese government.”

— Paul H. Liu, head of Solutia’s Asia-Pacific operations referring to a window film that blocks 81% of solar heat

I’m just sayin’…