The 1603 program under the American Recovery and Reinvestment Act has been an essential tool in deploying renewable energy resources in the U.S. over the past two years, successfully increasing U.S. manufacturing and creating new jobs for Americans. The program, which provides payments for renewable energy generation in lieu of tax credits, has provided much needed capital to more than 3,600 renewable energy projects in 46 states, plus the District of Columbia and Puerto Rico. Each federal dollar invested in these projects has been leveraged more than two to one by the private sector to help grow the U.S. clean energy industry.
The program has helped unlock frozen capital markets for renewable energy, allowing developers to get new projects off the ground and to restart projects that were stalled due to lack of financing after the 2008 financial crisis. Companies have been clear that the market certainty and incentives that came with the Recovery Act allowed them to continue projects that were halted and to make additional investments they otherwise would have moved overseas.
This Recovery Act funding is also successfully increasing U.S. clean energy manufacturing. The domestically manufactured content of wind turbines has more than doubled over the last few years, and in fact, a recent study by Lawrence Berkeley National Laboratory showed that in 2009, about 60 percent of the content was manufactured in the U.S — up from 25% just a few years ago. Because manufacturers tend to locate near to the demand for products, the expanded market supported by the Recovery Act has helped to attract new manufacturing plants in the U.S.
The lab’s research also found that these investments have put more than 50,000 Americans to work. The grants flow only to renewable energy generation projects installed in the U.S., which means that every dollar awarded through this program is helping to create construction and installation jobs here in America.
At a time when nations around the world are investing heavily in clean energy — both to meet growing demands at home and to increase competitive position in the export markets — the US must maintain our resolve to be a global leader in energy innovation. The 1603 program has been a strong success, demonstrating what’s possible when the federal government joins with the private sector to invest in America.
Cathy Zoi is the Acting Under Secretary for Energy.