Sens. Charles E. Schumer, D-N.Y.; Bob Casey, D-Pa.; Sherrod Brown, D-Ohio; and Jon Tester, D-Mont., have sent a letter to the Obama administration urging Treasury Secretary Timothy Geithner to suspend the Treasury's popular Section 1603 cash-grant program until new rules are implemented.
According to the senators, a recent report from the Investigative Reporting Workshop revealed that a clean energy grant program in the stimulus has paid out more than $1 billion to foreign manufacturers – 79% of the total amount issued. Consequently, the senators have proposed a change to the program to ensure that funds only flow to projects that will create jobs in the U.S.
‘The purpose of the Recovery Act was to jump-start the U.S. economy to create and save jobs – American jobs,’ the senators wrote in their letter to Geithner. ‘Our bill, the American Renewable Energy Jobs Act, would do just that by amending the Recovery Act to ensure that stimulus funds are distributed only to clean energy projects that preserve and create jobs in the United States.’
The new legislation also would make Section 1603 grants subject to ‘Buy American’ provisions. Under this provision, government projects financed in part by the stimulus must, with few exceptions, rely on iron, steel and manufactured goods produced in the U.S. The provision does not currently impose a similar requirement on private projects.
‘Based on this new language, project finance could not rely on the automatic availability of the grant,’ notes Rhone Resch, president and CEO of the Solar Energy Industries Association (SEIA) in a letter to members. ‘It would be effective on the date of enactment.’
‘Another consideration for the solar industry is the timeline for implementation of the new rules that could take several months to develop and require a new, more difficult application,’ Resch adds.
According to SEIA, although this bill will not be part of the jobs bill currently being considered by the Senate, it could be added to provisions in a separate Energy Jobs Bill expected later this month.