Biomass and 1603 Grants

By Bob Cleaves | April 25, 2012

Lately, there has been a small controversy surrounding the Department of the Treasury’s 1603 Grant Program. Like just about anything relating to the federal budget, the 1603 program is undergoing close scrutiny to determine whether the federal government is getting the most out of its increasingly scarce funds.

This program provides tax benefits for new and under-construction renewable energy facilities. The vast majority of these grants are awarded to wind and solar projects, but the comparatively small biomass grants added up to about $115 million for our industry last year. While the program is not perfect, it has been instrumental in helping biomass grow and provide power to hundreds of thousands more Americans each year.

Biomass projects across the country, including in Berlin, N.H., and Gainesville, Fla., have been able to secure 1603 grants, which in turn have strengthened their pitches to private investors and made their projects a reality.

Now that the presidential election is well underway, much is being made of the nation’s current economic situation and how it should be improved. Part of this conversation is whether the renewable energy industry, biomass included, is accountable for the new jobs that were projected from the 1603 program and other similar initiatives. The now-infamous stories about solar failure Solyndra have made the situation worse, creating more skeptics than there ordinarily would have been.

A Wall Street Journal article last month piled on the issue, pointing out several projects across the renewable spectrum that did not seem to live up to their job creation pledge.

What the Journal and many other critics of the program have failed to mention, though, is indirect jobs. Biomass projects in particular create and support construction, trucking, logging, supplier and many other jobs in addition to the full-time positions created at the facilities. Some estimates indicate that as many as seven jobs per megawatt are created or supported when a new biomass facility is built.

Luckily, the U.S. departments of Energy and the Treasury are fighting back against the skepticism of 1603 as a job generator.

If you have any firsthand stories about jobs created or supported with 1603 grants, I’d love to hear them and share them with administration and elected officials. Please contact me.
Author: Bob Cleaves
President and CEO, Biomass Power Association