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Renewable Energy Development Prospers in Economic Downturn

A picture of a wind turbine and the American flag with a blue sky background.

Up until 2008, tax credit incentives were the principal driver of investments in renewable energy. Due to economic downturn, "tax equity" investors were hard to find and renewable energy development in the United States was facing a slowdown.

The American Recovery and Reinvestment Act was enacted on February 17, 2009 and included several provisions to further incentivize investment in renewable energy. One of the most important was the Section 1603 Program, which offered investors a cash alternative to the 30% tax credit.

As a contractor to the U.S. Department of the Treasury for Section 1603, NREL helped establish the program and administers the application review process, reviews all applications, and makes recommendations on whether applications meet all 1603 Program requirements. While NREL was initially sought out for their expertise in renewable energy technologies; over time NREL's role broadened to include expert knowledge of financial structures and renewable energy project costs.

In April 2012, a report was released that found wind and PV projects participating in the Section 1603 program supported up to 75,000 jobs and $44 billion in total economic output from 2009 to 2011.

By the first half of fiscal year 2013, it was reported that nearly 77,511 projects had been funded accounting for more than 27.1 gigawatts of renewable energy, with an estimated annual electricity generation of 67.8 terawatt hours.

So although not all of the renewable energy projects completed in the United States during this time were participants in the Treasury 1603 program, as the program winds down, it's safe to say the Section 1603 program "kept the lights on" during a dark economic downturn, and NREL was an integral part of making that happen.

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