GRANTS INSTEAD OF TAX CREDITS FOR NEW ENERGY?

House Bill To Include Billions In Grants For Wind Projects
Martin Vaughan, January 15, 2009 (Dow Jones via CNN Money)

"House lawmakers are proposing to give solar and wind energy producers billions in government grants instead of tax credits to build renewable energy capacity, potentially transforming the way renewable energy projects have been financed…

"The new grant program, which will be administered by the Department of Energy, is part of House economic stimulus legislation…

"The new funding, which temporarily replaces the tax credit that wind and solar projects have long relied on with direct government spending, underscores President-elect Barack Obama's commitment to double renewable electricity production in three years."

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"Obama will give a speech on economic recovery Friday at a wind-turbine manufacturing plant in Ohio.

"The grant program is meant to address the collapse of the market for renewable energy tax credits…Large financial firms…historically have been the biggest users of the tax credits. But with the collapse of the banking sector and financial profits, banks no longer had enough tax liability to use the credits, putting new renewable power projects in jeopardy.

"Solar and wind groups lobbied Congress to make the tax credits refundable…lawmakers rejected that approach, and instead proposed a move away from tax credit financing altogether to support the industry through grants…a House Ways and Means Committee spokesman said the grant programs would be temporary…

"Besides the new grant program, the House stimulus bill would extend the production tax credit for wind by three years…The bill would also give wind farms the choice of either the production tax credit or the 30% investment tax credit now available only to solar and qualified fuel cell projects…"