Celebrate Solar!

17 Dec

The great federal grant program for renewable energy generation projects that inspired so many businesses to go solar is renewed for another year.

President Obama signed a tax package earlier today that extended a grant program, which provides 30 percent of the cost of a clean power project.

The program was born out of the American Recovery and Reinvestment Act of 2009 and was originally set to expired Dec. 31, 2010.

The program gives the cash equivalent of a 30 percent investment tax credit. The tax credit is good from 2009-2016, but it isn’t very useful for many renewable energy project developers, especially during this economic downturn, or if they want use it to attract banks or other investors who finance projects in exchange for the chance to use the tax credit.

Trade groups such as Solar Energy Industries Association (SEIA) wanted a 2-year extension, arguing that the economy will need that much fully recover. SEIA issued a statement last week noting that the program had helped 1,179 solar projects that has collectively attracted over $1.3 billion in investment across 42 states.

The prospect that the program would not be extended prompted many new projects  to rush to meet program rules that essentially gave them a grace period to complete their projects and still be eligible to receive the grant. Projects would’ve been eligible if construction had begun by the end of 2010, or if the developers proved they had spent or incurred 5 percent of the projects’ costs before the year’s end.

In the last few months, the California Energy Commission made it known that it was acting quickly to approve a series of large-scale solar power projects in order to allow the developers to start construction or meet the 5 percent rule. The commission held up its end of the bargain and approved all nine projects totaling more than 4.1 GW. The commission approved the ninth project earlier this week.

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