Senators Propose Renewable Energy Grant Extension

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"Program is crucial to keep renewable energy afloat."

A group of U.S. Senators Tuesday proposed extending a government program that provides cash grants to renewable energy developers in lieu of tax credits, a program developers have said is crucial to keeping the market afloat.

Sens. Maria Cantwell (D., Wash.), Dianne Feinstein (D., Calif.) and four other Democratic senators proposed extending the renewable tax-credit Treasury grant program another two years, through 2012, as part of a $140 billion bill to extend federal unemployment aid and renew a host of expired tax breaks.

The proposal would create at least 65,000 jobs in the solar power industry and tens of thousands of jobs in other sectors, Cantwell and Feinstein said.

"The clean energy sector is the next frontier in jobs creation, so we need to ensure that developers can access financing to launch wind, solar and geothermal projects and put people to work," Feinstein said.

The senators said the bipartisan proposal would carry a minimal cost and help "jumpstart" a transition in the U.S. to cleaner forms of energy.

The program frees developers from having to find a "tax equity" partner to take advantage of the credit. Before the financial crisis in 2008, Wall Street banks routinely provided tax equity financing for renewable energy projects, but those sources dried up after the market meltdown.

Extending the grant program will prevent a slowdown in U.S. renewable energy development, said the proposal's sponsors.

The amendment also would allow municipal utilities and other non-profit power producers that don't pay taxes to take advantage of the program for the first time.

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