The Solar Stimulus

Despite a weak economy, U.S. solar power companies increased their revenue by 36 percent last year and added 17,000 jobs.

A major reason for these gains were grants and tax breaks included in the economic stimulus bill, according to the Solar Energy Industries Association.

Extending this government assistance could produce another 200,000 jobs in the solar industry and supporting businesses, according to a study conducted for the association.

The stimulus breaks for the solar industry got off to a slow start, SEIA said, but by February 2010, more than 46 megawatts of solar capacity had been deployed with the help of cash grants that the Treasury Department offered in lieu of a commercial tax credit. As of February, 182 solar projects had received Treasury grants totaling $81 million.

This stimulus-funded program, which significantly lowers transaction costs for solar projects, is scheduled to end in December.

Extending the Treasury Grant Program for another two years would increase cumulative U.S. investment in solar electric technologies by $21 billion and generate an additional 67,000 jobs in 2015, according to a study conducted for SEIA by EuPD Research.

The stimulus bill also created an investment tax credit for manufacturers of equipment that make renewable energy components. In January, the Department of Energy awarded $2.3 billion of these tax credits to 183 projects, 60 of which were factories that supply the solar industry. The funding allocation for this program has been exhausted, however. Allowing solar manufacturing expenditures to be claimed under a separate existing investment tax credit would increase U.S. investment in solar technologies by $22 billion and add 158,000 jobs in 2016, according to the EuPD Research study.

"During the last year, the solar industry has been one of the bright spots in our economy," said SEIA President and CEO Rhone Resch. "It's time for Congress to extend the programs that have given new opportunity for Americans in the solar industry."