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Senators Feinstein and Merkley Introduce Measure to Spur Renewable Energy Development

Measure would extend and expand Treasury Department grant program

Washington, DC (Dec 17, 2009) – U.S. Senators Dianne Feinstein (D-Calif.) and Jeff Merkley (D-Ore.) today introduced a measure to spur the development of renewable energy employment and construction, such as wind and solar farms and solar panel factories. The bill would primarily extend and expand a popular Treasury Department grant program that was established in Section 1603 of the American Recovery and Reinvestment Act of 2009 in order to help diminish the impact of the economic crisis on the renewable energy sector.

The Treasury grant program helps renewable energy developers secure affordable financing to move forward with capital-intensive projects. It is currently slated to expire in 2010. The legislation introduced today by Senators Feinstein and Merkley would extend the program for two additional years, until 2012. It would also expand this program to allow public power utilities to participate, since they are currently ineligible.  Finally, it would create a new tax credit for solar manufacturing facilities and the construction of large solar projects on disturbed private lands.

“One of the consequences of the economic crisis was the shelving of major solar and wind projects, as readily-available financing evaporated,” Senator Feinstein said. “The stimulus bill established a new grant program to help restart these projects by allowing renewable energy developers to qualify for grants, or payments, from the Treasury Department instead of claiming tax credits. But the grant program is set to expire at the end of next year, before most construction is expected to occur and well before experts expect the tax equity markets to thaw. If the grant program is not extended, bank profits will again become the limiting factor on renewable energy development in the United States, and that makes no sense. This legislation would extend the grant program for two additional years, until 2012. It would also allow public power utilities to qualify for the grants program, since they provide energy for as many as 45 million Americans.”

Senator Merkley said, “This bill makes sure incentives for renewable energy keep functioning during this recession and keep acting as job-creation engines. It also extends this important job-generating program to utilities that serve many smaller Oregon towns and rural areas.”


Before this year, wind and solar developers were required to partner with large, profitable banks in complex financial agreements, where banks would provide their equity (or profits) to development projects in exchange for a 30 percent tax credit, and charge the developers a fee.

When the economic crisis struck, the tax equity market that financed renewable energy development was frozen and major projects were shelved and delayed.

Section 1603 of the American Recovery and Reinvestment Act (the Stimulus bill) established “payments in lieu of tax credits for specified energy property.”  The program allows renewable energy developers to qualify directly for a 30 percent federal grant for capital-intensive projects, equivalent to the amount they would have expected from tax credits.

Experts credit the grant program with helping to resume development of new major solar and wind projects.

Bill Summary

The Feinstein-Merkley bill, the Renewable Energy Incentive Act (S.2899), specifically would: