Congress is about to turn its back on renewable energy by allowing a crucial Treasury Grant Program to expire at the end of the year.
This program allows renewable energy developers to claim tax incentives. It is rightly credited with maintaining growth in the renewable energy sector in the middle of an economic downturn. The program has, so far, supported roughly $18.2 billion in clean energy investment to build 8,600 megawatts of renewable energy generation.
If Congress allows taxes to increase on renewable development, momentum could be lost. The future of renewable energy may be jeopardized.
This must not happen. A TGP extension is crucial to sustain the nascent domestic alternative energy industry. More than 30 senators publically support its extension. I call on all my colleagues to join in this support.
Renewable energy is America's hope to wean us off coal and oil, clean our air, reduce greenhouse gas pollution and create jobs. In recent years, success of TGP has led to the creation of more wind energy capacity than any other type of power plant.
In the past two years, TGP has funded 1,465 projects nationwide. Many are small enterprises. But we've also seen a recent increase in construction of massive alternative energy projects.
California is a prime example. Private companies are simultaneously building the world's largest wind farm (Terra-Gen's Tehachapi project, due to produce 800 megawatts of power) and the world's largest solar facility (BrightSource Energy's Ivanpah, an additional 370 megawatts).
Next year will see another 141 large renewable energy projects break ground in California alone - capable of generating more than 27,000 megawatts of energy and creating jobs in high-unemployment counties. But only if the Treasury Grant Program is extended.
The potential for job creation is enormous.
Wind energy projects funded by TGP were responsible for more than 55,000 jobs, according to a Lawrence Berkeley National Laboratory study. A two-year TGP extension could mean 65,000 more jobs in the solar industry, according to a study by EuPD Research, an independent consulting firm, and enough energy to power 1.2 million homes.
Before the economic meltdown, there wasn't a need for TGP. Developers formed "tax equity partnerships" with Wall Street banks, taking advantage of clean energy tax incentives. But the falling economy meant the $8 billion tax equity market seized up. The Treasury Grant Program is the only reason the industry expanded instead of freezing.
A survey of the leading banks that dominate the tax equity market revealed that ending the program could lead to a 56 percent decline in total financing available for renewable energy in 2011.
For critics of new government programs, it's important to note that TGP did not create a new federal incentive program. Instead, it allowed clean energy projects to make use of existing investment and production tax incentives.
The program has an impressive track record. It's a key tool in our efforts to diversify U.S. energy production and invest in America's energy infrastructure.
And it is proven to create jobs.
Sen. Dianne Feinstein (D-Calif.) serves on the Senate Appropriations Committee.