Pres. Obama’s economic stimulus bill passed the U.S. House, but its provisions that will help renewable energy, especially solar and wind power, are still in jeopardy unless lawmakers in the Senate and House can get together on their differences in their two versions of the bill.
This story from Greentech Media says the biggest difference in the two bills deals with allowing renewable energy projects to get direct payments instead of tax credits, a provision which solar and wind power industry groups say will be critical to jump-start funding:
Along with a host of plums for renewable energy – $8 billion in loans for renewable energy power generation and transmission projects and $2 billion for energy efficiency and renewable energy research – the House version of the stimulus bill contained a provision to convert investment tax credits that solar power developers rely on into direct payments to investors for the next two years.
Under the provision, the Department of Energy would pay grants equal to the amount of tax credits – 30 percent of qualifying costs of a project – directly to renewable power developers. The problem with using tax credits to lure investors today is that Wall Street banks and other renewable energy investors that saw big losses last year don’t have taxable income to offset, and thus no appetite for them.
Adding the DOE program would be a huge boon to a renewable energy sector that’s seen both debt and equity financing for projects dry up in the past few months, industry leaders say. Last year saw about $5.5 billion in tax equity deals, but without changes to the way the credit works, that could fall to $2 billion to $4 billion – and that for a solar industry expected to need more than $10 billion for projects in 2009.
But a version of the bill now being circulated in the Senate doesn’t contain the DOE grant provision, Chris O’Brien, head of North America market development for Swiss solar equipment maker Oerlikon Solar, said Wednesday.
Of course, the bills have to be reconciled before anything can go to the president for his signature. Plenty of us will be watching to see what happens.