The organization representing the US wind industry recently welcomed the US Department of Treasury’s release of guidelines that will allow companies to draw direct government payments instead of tax credits for clean energy facilities they place in service.

Denise Bode, CEO of the American Wind Energy Association (AWEA) said companies in the renewable energy sector will be able to “ramp up investments all across America” because of the move.

“As with all industry, the economic conditions of the past eight or nine months have held us back. We believe these grants will help get our companies back on track, create more jobs, and balance our electricity portfolio with clean, renewable energy. The implementation of this program for renewable energy will be a welcome boost, just when we all need it,” Bode said.

On Thursday, July 9, 2009, the Treasury department announced an estimated $3 billion in direct payments to be available for renewable energy projects around the US. These “grants” temporarily replace the tax credits that companies could previously file for to cover a portion of renewable energy projects’ cost.

But since the financial crisis, as clean energy companies began having a hard time getting project financing, the tax credit has been rendered almost useless as an investment incentive due to the companies’ lack of actual taxable income.

“[U]nder the new program, applicants would agree to forgo tax credits down the line in favor of an immediate reimbursement of a portion of the property expense. This direct payment program allows for an immediate stimulus in local economies,” the Treasury’s statement read.

Along with its announcement, the Treasury said it was releasing guidelines for businesses filing applications later this July. Renewable energy facilities activated since Jan. 1, 2009, will be able to file applications for the grants.

In 2006, about $550 million in tax credits were provided to 450 clean energy businesses, but installations have fallen along with the difficulty in project financing.

The Treasury and the Department of Energy said they both expect a fast acceleration of businesses applying for the energy funds.

“This partnership between Treasury and Energy will enable both large companies and small businesses to invest in our long-term energy needs, protect our environment and revitalize our nation's economy,” Treasury Sec. Tim Geithner said.

In 2008, wind power accounted for 42% of new electricity generation in the US. AWEA represents about 2,000 member companies in the wind sector.


- Eric Dorente