The Miami Herald trumpeted in a headline yesterday, “Despite federal aid, new energy jobs slow to bloom.” The article claims that the recession has hit the renewable energy space just like the rest of the economy, so renewable companies are slow to hire.
That’s true, of course, but it’s not the whole story. Despite the unprecedented level of support given for renewables through the 2009 Recovery Act, including the Section 48 Investment Tax Credit and the extension of the biofuel excise tax credits, this kind of support is not enough for projects to get off the ground. Any developer looking to break ground on a new project still needs cash to bring the project online.
The expanded role of the Department of Energy and the Department of Agriculture in issuing guarantees for qualified renewable energy projects was supposed to be the catalyst that would bring renewable projects into fruition faster, but these programs have been painfully slow in coming. While DoE and DoA grants and guarantees are helpful, a project developer still needs to raise a substantial amount of cash equity to take advantage of them, only to then proceed through the guarantee application process.