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Renewable Energy Sector Facing Challenges

December 12, 2011, 06:00 AM
Filed Under: Energy

According to an article from, the renewable energy industry was able to take advantage of a powerful financial vehicle; the 1603 Grant in Lieu of Tax Credit that was offered to developers of qualifying projects for the past two years. However, with the grant set to expire at the end of 2011, many are wondering how the industry will fare without it.

According to the article, Jeff Davis, a partner and co-head of the renewable energy practice at Mayer Brown said, "The financing of wind projects and solar projects and other technologies is going to fall back to the pre-grant incentives, namely the production tax credit and the investment tax credit."

The article states that during pre-incentive days, projects relied on funding from tax equity markets, which at the time had plenty of money to offer. But since the crash in 2008, the tax equity market hasn't bounced back as much as many hoped it would.
The report states another issue that will surely play out in 2012 will be the extension of the production tax credit (PTC) for wind energy projects. That program is scheduled to sunset on Dec. 31, 2012.

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