NEW YORK--(BUSINESS WIRE)--The American Council On Renewable Energy (ACORE) and the United States Partnership for Renewable Energy Finance (US PREF) jointly identified an impending gap in federal support for renewable energy projects at the close of 2010. At a press conference today at the Renewable Energy Finance Forum – Wall Street (REFF – Wall Street), top leaders from the financial industry discussed the anticipated post-stimulus landscape for renewable energy and expressed grave concern about potential deceleration and loss of jobs. In particular, the group called for extension of the 1603 Renewable Energy Treasury Grants, also known as the Grant in Lieu of Investment Tax Credit.
“The renewable energy industry is facing a new double crisis: first, a “stimulus cliff” will occur as the ARRA provisions sunset, and, second, a drought of capital continues because the financial crisis has not ended,” said Michael Eckhart, President, American Council On Renewable Energy. “Indeed, the financial crisis goes on, and if not addressed, the situation risks losing thousands of jobs that were just gained under ARRA.”
With the financial crisis is likely to go on for another 1-2 years, the group agreed that the tax equity markets are likely to remain extremely challenging and lack depth to continue renewable adoption without a material fall off at the end of the year and the 1603 cash grant program, the loan guarantee programs, and manufacturing incentives will be needed to provide vitally important cash infusions and financing to project developers.
“The project equity markets have not returned to their pre-crisis levels and the Recovery Act measures helped save the situation,” said Patrick Eilers, Managing Director, Madison Dearborn Partners, who serves on the Board of Directors for U.S wind energy company First Wind. “For example, with access to the ITC grants and other measures to help fill the finance gap, the U.S. wind industry saw a 39% increase in installed capacity in 2009. The uncertainty and volatility in the tax equity and credit markets make the grants program fundamental to developers that would otherwise be unable to commit risk capital to start to build projects.”
”The elimination of the Treasury Grant Program will cause a significant decline in the continuous development of renewable resources in the United States,” added Jeffrey Holzschuh, Vice Chairman, Morgan Stanley.
“All the clean energy sectors are at risk,” said Neil Auerbach, Chair, US PREF, and Co-Managing Partner, Hudson Clean Energy Partners. “As an example, solar installations are increasing and the development pipeline is growing, but financing is constrained. On the line are thousands of jobs, more than five gigawatts of clean energy capacity and billions of dollars in investment in the next five years. The stakes are high and we need to be able to get these projects to the finish line.”
Identifying a number of federal programs at risk, the group agreed that stimulus programs are currently driving the market and pitched the need for extensions to maintain market activity. In addition to 1603, policies discussed were the 1703 and 1705 Loan Guarantee Programs, including the Financial Institution Partnership Program (FIPP), Production Tax Credits (PTC) and Investment Tax Credits (ITC). The group also discussed the importance of proposed policies to support the investment environment in the longer term, including renewable energy standard offer contracts and rates, a Clean Energy Deployment Administration (CEDA or “Green Bank”) and pending climate and energy legislation.
The American Council On Renewable Energy (ACORE), a 501(c)(3) membership non-profit organization headquartered in Washington, DC, is dedicated to bringing renewable energy into the mainstream of the US economy and lifestyle through research and communications programs and membership committees. ACORE’S membership works in all sectors of the renewable energy industries including wind power, solar energy, geothermal energy, hydropower, ocean energy, biomass, biofuels, and waste energy. ACORE provides a common platform for the wide range of interests in the renewable energy community including end users, technology companies, manufacturers, utilities, professional service firms, financial institutions, colleges and universities, associations, non-profit organizations and government agencies. ACORE serves as a thought leadership forum through which these parties work together on common interests. ACORE co-organizes the REFF-Wall Street and REFF-West Finance Conferences, the RETECH All-Renewables Energy Conference and Exhibition, the Phase II National Policy Forum in Washington, DC, and hosts both domestic and global policy events furthering the mission of renewable energy. Additional information is available at www.acore.org
About US PREF:
The objective of the US Partnership for Renewable Energy Finance (US PREF) is to unlock private capital flows to new, large-scale and distributed renewable energy projects in the United States. To achieve this objective, a balanced and credible group of highly experienced renewable energy financiers from financial institutions, investors, professional services firms, utilities and others, working with leading non-government organizations, have convened as US PREF. US PREF members include Bank of America Merrill Lynch, Citi, Credit Suisse, Deutsche Bank, GE Energy Financial Services, Google, Green Order, Hudson Clean Energy Partners, Madison Dearborn Partners, Morgan Stanley, NRG Energy, Skadden Arps, SolarCity, Starwood Energy, Troutman Sanders LLP, US Renewables Group and VantagePoint Venture Partners. US PREF is a program of the American Council On Renewable Energy (ACORE), a 501(c)(3) non-profit organization. www.uspref.org.