A one-year extension of the Section 1603 cash-grant program from the U.S. Department of the Treasury would create an additional 37,000 solar jobs in 2012, according to a new report from the Solar Energy Industries Association (SEIA) and market research firm EuPD Research.
The report examined projected job growth and solar deployment associated with a one-year extension of the program, which is set to expire at the end of this year. SEIA and EuPD Research found that a one-year extension would result in nearly 2,000 additional MW of solar installations above baseline by 2016.
An additional 37,394 jobs would be supported by the solar energy industry in 2012 – a 12% increase over baseline: 18,000 people would be directly employed by solar companies or indirectly employed by firms that support the solar sector, and an additional 19,000 jobs would be induced by the industry's economic activity.
The additional cumulative capacity installed (2012-2016) would be about 2,000 MW over baseline, enough to power 400,000 homes. According to the report, 500 additional MW above baseline would be installed in 2012. The study also analyzed scenarios for two-year and five-year extensions of the program.
The program was created in 2009 in the wake of the financial crisis, which drastically reduced the availability of tax-equity financing for energy projects. It allows energy developers to receive a federal grant in lieu of claiming an existing energy tax credit. The program does not create any new incentives, but instead simply accelerates the timing of the existing credit, SEIA explains.
According to SEIA, the state of the financial markets and the availability of tax equity are still woefully inadequate to meet demand for renewable energy projects.
‘At a time when President Obama and Congress are looking for solutions for America's jobs crisis, it would be unconscionable to allow this proven job-creating program to expire,’ says SEIA President and CEO Rhone Resch. ‘Killing the 1603 program amounts to a tax increase on the thousands of small businesses that are creating jobs in solar.’Â