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An amendment proposed by Sen. Debbie Stabenow, D-Mich., that would have extended the U.S. Department of Treasury's Section 1603 program and other renewable energy tax incentives failed to receive approval from the U.S. Senate.

Stabenow's legislation sought to revive the Section 1603 program and other incentives via an amendment to the Surface Transportation Bill (S.1813), legislation focusing on highway improvements. Her amendment - known as amendment #1812 (Energy Tax Extenders) - needed to receive 60 votes in order to be included in S.1813. However, it received just 49 votes. (The full vote breakdown, by senator, is available here.)

"We cannot allow a tax increase on American businesses that are creating clean energy jobs in America," said Stabenow in a statement when she introduced the legislation. "These entrepreneurs are inventing new technology, hiring workers, and producing cutting-edge new products that save consumers money and reduce our dependence on foreign oil."

The 1603 program provided a 30% cash grant in lieu of tax credits to eligible solar projects and proved to be extremely popular among U.S. solar developers until its expiration. The renewal of this program ranks among the top legislative priorities for the Solar Energy Industries Association (SEIA) and many solar firms.

However, given that the 1603 program just ended a few months ago, the full effect of its expiration remains to be seen, according to Bill Bush, chief financial officer at PV integrator Borrego Solar. Further complicating matters are provisions that allow certain solar projects grandfathered in under the safe-harbor deadline of Dec. 31, 2011, to remain eligible for a cash grant.

"Honestly, it's hard to know [the effects of today's vote] at this point," Bush tells Solar Industry. "Development is still at a brisk pace as we - and other developers - work through safe-harbored projects."

Although today's vote was widely regarded as one of the industry's primary chances for seeing a 1603 extension, other avenues still exist. President Obama's proposed fiscal-year 2013 budget, for instance, provides for an extension of the 1603 program. However, this budget must clear a series of legislative hurdles in order to be implemented as originally written.

The solar sector also recorded a small victory in today's Senate session, as an S.1813 amendment introduced by Sen. Jim DeMint, R-S.C., was defeated. DeMint's amendment sought to repeal all energy tax credits, including the investment tax credit (ITC) for solar energy, and replace them with a lowered corporate tax rate.

SEIA and other solar sector advocates had urged senators to reject DeMint's amendment, noting the negative effect it would have on the industry. The proposal was defeated by a vote of 26-72.

"We are fortunate in that the ITC is valid through 2016," Bush says. "I suspect that will be the primary source of solar financing once the safe-harbor backlog is exhausted."




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