Solar Industry: 1603 Extension Would Add 37,000 Jobs

The solar industry on Wednesday launched its opening salvo to build support for an extension of a Treasury Department program its says has the potential to add tens of thousands of jobs while continuing to spur billions in private investment.

Rhone Resch, president and CEO of the Solar Energy Industries Association (SEIA), spoke with the media to discuss the soon-to-expire Section 1603 Treasury Grant program, which allows energy developers in many industries such as solar, wind and biomass to receive a 30 percent grant in lieu of an existing tax credit. This direct payment comes only after a development comes online.

The grant, said Resch, has helped the solar industry become one of the fastest growing sectors of the economy. Since its inception in 2009, the program has helped partially fund nearly 20,000 commercial solar projects with a combined capacity of more than 800 megawatts. It was conceived as a tool to combat a sagging tax equity market that developed during the economic downturn in 2008. Since then it has become a vital part of financing for all types of renewable energy projects, giving developers the type of liquidity needed to draw new investment.

Resch warned that allowing the grant to expire could cause the American solar industry to contract. A new report by EuPD Research released by SEIA on Wednesday found that a one-year extension could add more than 37,000 jobs — 18,000 directly in the solar industry and 19,000 in industries affected by industry growth.

“These are electricians, roofers, plumbers, steelworkers, those in sales and accountants,” said Resch. “You can’t outsource these jobs.”

The report also looked at scenarios for two-year and five-year extensions. Under the two-year scenario, more than 50,000 jobs would be added while well over 100,000 jobs would be created under the five-year plan.

The industry has already gone down this avenue in search of an extension. This time, though, the road may not be as well paved. Last December, lawmakers pushed through late legislation that extended the program through the end of 2011. But that was in a much different Washington. Since then, the House has swung firmly under Republican leadership and Democrats now hold a fragile advantage in the Senate. And nearly all legislation geared toward renewable energy must overcome conservative skepticism that has been fueled by the Department of Energy’s loan to now-bankrupt Solyndra.

Still, Resch said getting bipartisan support for a one-year extension is possible if the industry can successfully outline the economic and security benefits of Section 1603. While it’s still too early to tell what kind of broad support there is for an extension, or to which piece of legislation an extension would be attached, solar industry representatives will meet with legislators to explain how the program’s expiration could impact businesses and communities.

More than anything, Resch said an extension would quench a business appetite for a more consistent policy and municipal demands for the increased tax base that is often sparked by energy development. According to Resch, these have been staples of an energy economy that has been built upon subsidies and incentives aimed at the fossil fuel industries for decades.

“What we’re asking for is a level playing field,” said Resch. “It’s difficult to gain investment with an on-again, off-again policy.”

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