The Treasury Grant Program has been a huge success for the solar industry. By allowing developers and financial institutions to take a cash grant instead of a tax credit — an instrument still hard to monetize due to the economic malaise — solar has become one of the fastest growing industries in America, expanding 102% in 2010 during one of the worst economic times in our nation’s history.
But the Grant Program is set to expire at the end of this year. Although the grants have been a resounding success for the renewable energy sector, the program is politically tarnished because it was created under Obama’s stimulus program.
Allowing this program to get killed by election-year politics would be a major mistake, as it would severely limit the growth of a valuable industry that has boomed in spite of the lagging economy.
A new report out from the business-to-business market research firm EuPD Research shows the immense economic value that could be created with an extension of the program. According to the report, which was commissioned by the Solar Energy Industries Association, a simple one-year extension of the Treasury Grant Program could leverage an additional 37,000 jobs — a 12% increase over the baseline. That could also help bring an additional 2 GW of solar projects online from 2012 to 2016.
A five-year extension through 2016 could result in an additional 114,000 jobs — a 32% increase in employment. That could result in an additional 7.3 GW of installations over the baseline scenario, as this figure shows:
All those jobs and installations would bring strong domestic value. In 2010, the U.S. solar industry even had a $1.9 billion trade surplus with the rest of the world and a $247 million surplus with China, according to a study from GTM Research. That report also concluded that 73 cents of every dollar spent on a U.S. solar installation stayed within the country.
Because there aren’t as many financiers with the “tax appetite” (i.e. profits) to take advantage of tax credits, the grant program is vital to bringing in additional investors and maintaining the current momentum in the solar PV sector.
The Treasury Grant Program is a simple, proven mechanism that should be at the top of any political leader’s “to do” list when considering job creation. Let’s not let politics get in the way of America’s fastest growing industry.