United States President Barack Obama has signed the 2010 tax relief legislation that will extend Recovery Act grants for renewable energy projects through 2011.
President Obama signed the bill last Friday, effectively earmarking $3 billion of the federal budget for renewable energy funding. Support will be made available to renewable energy project developers through Section 1603 of the 2009 Recovery Act.
Section 1603, otherwise known as the Treasury grant program, provides federal grants equivalent to 30 percent of the total property cost of a commercial renewable energy installation. The program has supported more than 4,000 clean energy projects to date, including more than 1,100 solar energy installations.
A report by the Lawrence Berkeley National Laboratory concluded that the renewable energy industry relies heavily on the treasury grant program for funding, especially the wind power sector.
   |
   |
According to the report, the wind sector collected 86 percent of the $2.6 billion federal budget allocation for renewable energy grants as of March 1, 2010. The geothermal sector acquired 6 percent while solar and biomass received 4.5 percent and 2.8 percent respectively.
An assessment by the Solar Energy industries Association found that the program has supported approximately 20,000 green jobs in the United States solar power industry since July 2009, about 6,000 of which were created directly.
Federal support also reportedly encouraged $18 billion in solar power investments, allowing the sector to expand by more than 100 percent in 2010.
“With an extension of the 1603 program now in place, the solar industry can continue its record growth, creating new career opportunities for Americans in all 50 states in 2011,» said Rhone Resch, president and chief executive of the Solar Energy Industries Association.
“As well as cutting taxes for Americans, this bill will help save tens of thousands of American jobs and allow wind energy to continue creating manufacturing and construction jobs in states that desperately need them, like Michigan and Kansas, where new plants are ready to meet the demand that these tax credits will help create,» added Denise Bode, chief executive of the American Wind Energy Association.
Energy efficiency and biofuel provisions
Aside from preserving the treasury grant program, the tax bill will also extend renewable energy programs for energy efficiency and biofuel.
The bill will extend the domestic support for biofuel production through 2011, including the current 45-cent-per-gallon subsidy for ethanol and the tax credit for biodiesel production rated at $1 per gallon.
It will also continue the 30 percent investment tax credit for infrastructure supporting alternative ethanol, hydrogen, biodiesel and natural gas.
Meanwhile, builders of energy-efficient homes can continue to apply for up to $2,000 in tax credits through 2011 with the bill’s extension of the energy-efficient new homes credit. It will also continue the tax credit for energy efficient retrofits till the end of 2011, which is capped at $500 for each taxpayer.
