Green tax credit possible;

new green loans, probably not

January 1, 2010

An extension of the green tax credit for manufacturers is likely to be part of any jobs bill. A top DOE official threw cold water on a proposal to create a new revolving loan fund for small and medium-sized manufacturers, saying that it is duplicative. Federal Energy Regulatory Commission (FERC) refused to remove a paperwork roadblock for one solar services co. that complicates sales of roof top solar systems, but may later amend the regulation for all.

Extension of Green Tax Credit for Manufacturers Likely

Both President Obama and members of Congress seem resolute about replenishing the green tax credit for manufacturers approved as part of the American Recovery and Reinvestment Act (ARRA)—also referred to as the stimulus bill—last winter. The tax credit allows companies to write off 30 percent of the cost of creating, expanding, or re-equipping facilities to manufacture renewable-energy industry equipment and components, such as solar panels, wind turbines, and advanced batteries. Prior to the ARRA, all other tax credits approved have been only for the use of renewable-energy technology.

The ARRA authorized the Depart-ments of Energy (DOE) and the Treasury to award up to $2.3 billion in tax credits. Because of an unexpectedly high number of applicants, that program was expected to run out of funds by mid-January 2010. A bipartisan group of U.S. senators introduced a bill Dec. 10 called the American Clean Technology Manufacturing Leadership Act (S. 2857), which would provide an additional $2.5 billion in tax credits, enough to leverage $8.33 billion in new domestic investment. Six days later, Vice President Joe Biden threw the administration's weight behind an additional $5 billion in credits, upping the congressional ante considerably.

DOE Calls Green Loan Guarantees for Small Manufacturers Duplicative

A top DOE official threw cold water on a proposal to create a new revolving-loan fund for small and medium-sized manufacturers. The DOE told a Senate Energy Committee subcommittee on Dec. 8 that programs already in place aim to accomplish the same thing as the Investments for Manufacturing Progress and Clean Technology Act of 2009 (S. 1617). Introduced by Sen. Sherrod Brown, D-Ohio, the bill would award grants to states to establish revolving-loan funds for small and medium-sized manufacturers to produce clean energy technology and energy-efficient products and to reduce greenhouse gas emissions from manufacturing facilities. A companion bill (H.R. 3083) has been introduced in the House by Rep. John Boccieri, D-Ohio.

The Loan Guarantee Program, which Congress created in 2005, has had a bumpy history. The program solicitations do not have special provisions to promote the award of loans to small businesses, which are the target of the Brown-Boccieri bill. In addition, the program is focused only on making technological advancements.

The DOE is in the process of developing a Manufacturing Solicitation within the Loan Guarantee Program that would be open to small and medium enterprises (SMEs) under its Financial Institutional Partnership Program (FIPP).

FERC to Rooftop Solar Installers: No Regulatory Relief; Not Yet, Anyway

In rejecting a request for regulatory relief from one solar power services company, the Federal Energy Regulatory Commission (FERC) refused to remove a paperwork roadblock that complicates sales of rooftop solar systems. The application for relief came from SunEdison, which installs rooftop solar systems on commercial buildings.

Each time a business uses the solar power for itself and does not sell any of it to the grid, SunEdison has to file what is called a QF self-certification with the FERC to exempt it from completing all sorts of other paperwork. SunEdison requested that the requirement to file the QF self-certification form be dropped.

In late November, FERC went thumbs-down on SunEdison's request to stop filing those forms. However, the FERC has recently proposed amendments to its regulations so that generating facilities of 1 MW or less claiming QF status will be exempt from the requirement that they make a filing. Should the amendments be finalized as proposed, SunEdison will get its wish, eventually.

Sources:

www.energy.gov
www.eere.energy.gov