Clean Energy, Smart Grid Stay in Stimulus Bill

The House and Senate have agreed to keep $20 billion in tax incentives for renewable energy and energy efficiency – and retain a key change to allow tax credits to be paid out as grants for clean power projects. But loan guarantees for renewable energy may be lower than hoped.

While Congress hasn't voted yet on its massive economic stimulus bill, some of the details of interest to the renewable energy and smart grid industries are emerging -- and for the most part, they look positive.

With a price tag of just under $790 billion, the compromise stimulus bill that emerged from Congress on Thursday retains much of its positive impact to renewable energy and energy efficiency, according to a conference report from House Speaker Nancy Pelosi's office released Thursday.


That includes "a total of $30 billion for such initiatives as a new, smart power grid, advanced battery technology, and energy efficiency measures, which will create nearly 500,000 jobs," Pelosi's office reported.

There are also $20 billion in tax incentives for renewable energy and efficiency – including a provision that would allow renewable energy developers to convert a 30 percent investment tax credit into direct payments to investors for the next two years (see Tax Credit for Solar in the Works).


That provision was in the House version of the bill but not in the Senate version (see Senate Passes Stimulus Package). But it made it through to the present version – and that's critical for renewable energy development, said Rhone Resch, president of the Solar Energy Industries Association, in a prepared statement.


Potential solar and wind power investors that lost money last year have lost their appetite for tax credits. Getting grants to developers directly could boost renewable power installations, leading to up to 67,000 jobs this year, Resch said. Also, a 30 percent manufacturing tax credit for companies making equipment for building solar, wind and other renewable energy power plants made it into the current bill, according to Pelosi's office. That provision was originally in the Senate bill but not the House bill.

The bill allows wind power projects that previously could take a production tax credit of 1.9 cents per kilowatt-hour produced for the first ten years of operation to instead claim an investment tax credit for the cost of building wind farms (see More Stimulus For Renewables?).
The stimulus bill now extends tax credits for wind power through 2012 and other renewable sources – including biomass, geothermal, hydropower, landfill gas, waste-to-energy and marine power – through 2013. Solar power had its tax credits extended eight years by Congress in October.

But renewable energy might not get as much in loan guarantees as the industry had hoped for. That's according to a confidential "stimulus conference agreement chart" posted online by the Talking Points Memo blog, which shows the bill emerging from conference will set aside $4 billion in loan guarantees – less than the $6 billion in the House bill and the $7 billion in the Senate bill.

That stands in contrast to an Associated Press analysis that states the bill contains $13.9 billion to subsidize loans for renewable energy projects. The document posted by Talking Points Memo also shows that a program to develop cleaner power plants run on fossil fuels is set to receive $3.4 billion, about $1 billion more than in the House and Senate versions

A program to help people weatherize their homes is set to get $5 billion, between the House's $6.2 billion and the Senate's $2.9 billion. Energy efficiency and clean energy grants for state and local governments now stand at $6.3 billion, between the House's $6.9 billion and the Senate's $4.7 billion.

There are also $2 billion in grants for manufacturing advanced battery systems and other components for cars, and $4.5 billion in grants for upgrading regional transmission networks with "smart grid" technologies and training workers for them (see Draft Stimulus Plan Has Billions for Smart Grid).

"The revised stimulus package's big boost in spending for smart-energy programs really speeds us on the road to energy independence," said Adrian Tuck, CEO of Tendril Networks.

Overall, smart grid technologies are set to receive $11 billion, and making federal building more energy efficient has $4.5 billion set aside, Pelosi's office said.

Purchasing a plug-in hybrid will come with a $7,500 tax credit, and the bill also extends tax credits for buying energy efficient building materials and water heaters.

As for research, the bill has $400 million for the Advanced Research Project Agency-Energy, aimed at "high-risk, high-payoff research into energy sources and energy efficiency in collaboration with industry," and $580 million for the National Institute of Standards and Technology, Pelosi's office said.