SUN NEEDS POLICY NURTURING

Tax policies could add jobs, MWs of new solar-SEIA; Industry group wants grant program, tax credits extended
Dana Ford (w/Gerald E. McCormick), May 19, 2010 (Reuters)

"Tax credits and a two-year extension to a federal grant program for U.S. solar projects would add roughly 200,000 jobs and almost 10,000 megawatts of new solar installations…[according to] research done by EuPD Research…[T]he Solar Energy Industries Association (SEIA) urged the U.S. government to extend [the] grant program, set to expire this year, through 2012.

"The program, established in 2009 under the U.S. Recovery Act, was meant to help fill the financing void left by shrinking tax equity markets…Historically, banks have used tax equity markets to fund solar projects by buying government tax credits from the project owners…[The bank capital covered] the costs of development…But as the credit crisis hit the financial markets, banks' appetite for those tax credits disappeared…"

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"SEIA is also calling on the government to allow solar manufacturing costs to be claimed as an investment tax credit…Combining a possible grant extension with the ability to apply for tax credits would create some 200,000 jobs and lead to nearly 10,000 MW of new installations in the United States by 2016…[O]ne megawatt is enough to power some 250 average U.S. homes.

"Installed solar capacity in the United States jumped 37 percent last year as state and federal incentive programs helped to prop up demand during a downturn…It was the fourth straight year of growth, but without changes to current policy…[SEIA] said the U.S. solar industry could grind to a halt."

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"Several of the big solar players, including industry heavyweight First Solar Inc, have plans to develop large-scale projects under the grant program, and have been working to meet the year-end 2010 deadline…Many projects are at risk of missing the cutoff because of permitting and other scheduling delays…"

[Rhone Resch, President, SEIA:] "Our policies are on again, off again. What we need is some stability…"