Washington, DC, USA -- On a conference call today, Rhone Resch of the Solar Energy Industries Association (SEIA), along with Ed Fenster, co-founder and CEO of SunRun, Mark Conroy, president and CEO of MegaWatt Solar, and Eric Hafter, senior vice president of Sharp Solar Energy Solutions Group called for a two-year extension of the Treasury Grant Program (TGP). The TGP allows investors in renewable energy project developments to take an upfront payment equal to 30% of the project's cost instead of filing for a tax credit for the same amount.
The program was started after the financial crisis of 2008 shrunk the number of tax equity investors who could invest in renewable energy projects from about 28 to virtually zero. Rhone Resch said that today there are approximately 7 or 8 tax equity investors with enough tax appetite to invest in projects, which means the market is coming back, but isn’t fully recovered. As it was written, the TGP is set to expire at the end of 2010.
Resch said that the industry is only looking for a two-year extension because the belief is that the tax equity market will be fully recovered by the end of 2012.
As State Subsidies Diminish, TGP Is Crucial
According to Ed Fenster of SunRun, the TGP is absolutely essential to the growth of solar energy development. He said that even in California, the largest solar market in the United States, local subsidies are not helping with development of projects. Soon the paperwork required to get local subsidies will be more of a hassle than the subsidies are worth, he said. [Note, for more on SunRun's solar leasing business, check out How Solar as a Service Began, also published today on RenewableEnergyWorld.com.]
Mark Conroy of startup MegaWatt Solar concured. “Without the TGP, companies like MegaWatt won’t gain investors and the infusion of capital needed to sustain growth,” he said. “A lot of companies in my situation are heavily dependent on the passage of a bill like this,” he added.
The solar industry executives are hoping for the extension to be passed during this lame duck session of congress as part of a tax extenders package or an omnibus appropriations bill.