Update: Treasury & DOE Award US $500M in Recovery Act Grant Funds for Renewables

"The Recovery Act is investing in our long-term energy needs while creating jobs in communities around the country," said Treasury Secretary Tim Geithner. "This renewable energy program will spur the manufacture and development of clean energy in urban and rural America, allowing us to protect our environment, create good jobs and revitalize our nation's economy."

Created under Section 1603 of the Recovery Act, the program is expected to provide more than $3 billion in financial support for renewable energy projects by providing direct payments in lieu of tax credits. These payments will support an estimated 5,000 bio-mass, solar, wind, and other types of renewable energy production facilities in all regions of the country over the life of the program. 

The grants are designed to temporarily replace the production tax credit (PTC) that has been a major factor in the continued growth in wind and other renewable energy projects. The recession and the freeze in the credit markets that began late last year rendered the PTC much less useful as an investment incentive.

The Treasury Department opened the application process for the 1603 program on July 31, 2009 and made the first awards in half the mandated turnaround time of 60 days. The projects funded in the first round are listed below. Treasury said that additional awards under the program will be announced in the coming weeks.

Iberdrola Renewables Inc. confirmed that it recieved five of the grants totaling $294,889,003 to support wind projects in four states. The Penascal, Moraine II, Locust Ridge II, Hay Canyon and Pebble Springs Wind Projects are all being developed by Iberdrola.

“Switching from the PTC to the grant program was made necessary by the collapse of U.S. financial markets last fall. This change will enable our company and others to keep investing in new renewable energy while the financial markets mend," said Ralph Currey, president and CEO. "Thanks to the grant program, Iberdrola Renewables is proceeding with new renewable investments in 2009 and will continue to do so next year and beyond.”

Currey said the company expects the Treasury to act on three additional grant applications this month.

The American Wind Energy Association (AWEA) welcomed the announcement and said the funds will spur more investment across the industry.

“For these grantees and many other projects that are preparing their applications, we are seeing business activity picking up and turbine and parts orders being sent all the way up the value chain,” said Rob Gramlich, AWEA's senior vice president for public policy. “That activity had all but dried up and it is very encouraging to see this turnaround underway. Time will tell if that market signal is strong enough to keep the 85,000 people working in the wind industry employed for the next couple of years.”

Check back with RenewableEnergyWorld.com for more industry reaction as well as more grant award announcements in the coming weeks.