WASHINGTON, Sept 1 (Reuters) – The U.S. Energy and Treasury Departments on Tuesday announced $503 million in government cash grants to companies developing renewable energy projects
The funding will help meet the Obama administration’s goal of doubling U.S. renewable energy production over the next three years, creating jobs and providing financing on easier terms than many companies can obtain in the private sector.
This the first round of some $3 billion in direct payments to companies in lieu of tax credits to eventually support an estimated 5,000 biomass, solar, wind and other renewable energy production facilities.
“These grants will help America’s businesses launch clean energy projects, putting Americans back to work in good construction and manufacturing jobs,” said Energy Secretary Steven Chu.
The money comes from the economic stimulus package approved by Congress earlier this year.
Previously, energy companies could file for a tax credit to cover a portion of the costs of a renewable energy project. Under the new program, companies would forgo the tax credits in favor of an immediate reimbursement of a portion of the property expense.
“This renewable energy program will spur the manufacture and development of clean energy in urban and rural America, allowing us to protect our environment, create good jobs and revitalize our nation’s economy,” said Treasury Secretary Tim Geithner.
Twelve projects were awarded grants. The companies receiving the most money were the Penascal wind farm ($114.1 million) in Sarita, Texas; the Locust Ridge II, LLC wind project ($59.2 million) in Shenandoah, Pennsylvania; the Canandaigua Power Partners, LLC wind project ($52.4 million) in Cohocton, New York, and the Wheat Field wind farm ($47.7 million) in Arlington, Oregon.
Iberdrola Renewables Inc., a subsidiary of Spain’s Iberdrola SA (IBE.MC), was awarded $294.9 million for five wind projects, bringing the company’s investment so far in U.S. wind power to about $1 billion.
The 12 winning projects would be able to produce 840 megawatts of electricity, representing a 3 percent increase in total U.S. renewable electricity generation capacity, the Energy Department said. One megawatt powers about 800 homes.
The American Wind Energy Association welcomed the grants, which it said would help wind energy companies get through the recession.
“For these grantees and many other projects that are preparing their applications, we are seeing business activity picking up and turbine and parts orders being sent all the way up the value chain,” said AWEA Senior Vice President for Public Policy Rob Gramlich. “That activity had all but dried up and it is very encouraging to see this turnaround under way.”