Dec. 8 (Bloomberg) -- Jobs will be cut in the solar and wind industries unless a U.S. tax-grant program that companies have relied on is extended, renewable-energy advocates said.
Retention of the 1603 program, which gives developers grants equal to one-third of a project’s value, wasn’t included in the tax package negotiated by President Barack Obama and Republicans in Congress. The program, now scheduled to expire on Dec. 31, was added to last year’s stimulus act to help companies unable to get financing during the financial crisis.
The grant program is “the most important policy for continuing growth of the renewable-energy industry in the United States,” Rhone Resch, president and chief executive officer of the Solar Energy Industries Association, said today on a conference call with reporters.
A one-year extension would cost $1.36 billion over 10 years, according to the congressional Joint Committee on Taxation. Senator Maria Cantwell, a Washington Democrat, is among lawmakers who urged congressional leaders to extend the grants.
While companies can still get production and investment tax credits that they can sell to investors, Resch said the market for the credits has declined in the economic slump. Seven companies buy the tax breaks on a secondary tax-equity market, compared with 27 before the economy soured, Resch said.
More than $5.5 billion in grants had gone to companies as of November, supporting more than $18 billion in clean-energy development, according to the solar-industry trade group.
The industry added 1,000 megawatts of capacity in 2010, up from 470 megawatts in 2009, Resch said. With the grants, the solar industry would add 2,000 megawatts in 2011 compared with 800 megawatts if the program expires, Resch said.
Denise Bode, CEO of the American Wind Energy Association, said “tens of thousands of jobs” are at risk.
The wind industry would create 20,000 new jobs next year if the grants are extended, renewable-energy groups said in a letter yesterday to congressional leaders. The workforce may contract by 25 percent without them, the groups said.
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