$1.2 Billion in Cash Goes to Energy Projects, Despite Sequestration
Michael Sandoval /
Rainer Jensen/dpa/picture-alliance/Newscom
Despite a fiscal cliff and sequestration worries, more than $1.2 billion in cash payments for energy projects (in lieu of tax credits) have been issued by the Department of Treasury and Department of Energy since January 1, according to documents from the U.S. Treasury.
Through February 14, $1,254,769,726 was distributed by the 1603 program to 435 solar, wind, and other renewable energy projects. The vast majority of the projects—381—were for solar electricity. The cash payments represent up to “30% of the project’s total eligible cost basis” in lieu of investment tax credits.
The average 1603 payment made in the first six weeks of 2013 for all projects was $2.88 million, with awards ranging from $120.2 million for a wind project in New York to $4,000 for a solar project in Montana.
However, 29 projects received more than $10 million in cash payments—averaging $30 million each—and made up approximately 70 percent of the $1.2 billion in awards. Fourteen of these projects were for solar electricity, 13 for wind, and one each for a fuel cell and a landfill gas project.
Approximately $17.2 billion in cash payments have been distributed since the program began in 2009, with $9.2 billion for wind projects and $2.7 billion for solar through last July. The total amount of electricity generation produced by the more than 45,000 projects represents just 1.2 percent of the nation’s overall electricity generation for 2012, according to figures from the U.S. Energy Information Administration (EIA).
The EIA’s February 2013 figures for net electric power generation and consumption for the year 2012 show that wind made up 3.45 percent, while solar inputs comprised 0.11 percent.
Section 1603 payments have not escaped sequestration, though awards will continue to be distributed for at least the next six months. Projects awarded Section 1603 funds beginning March 1, 2013, and continuing through September 30, 2013, will see an 8.7 percent reduction in their award amounts.