U.S. renewable-energy and clean-technology industries are pressing for proposals not included in the energy and climate bill released this week, changes they say are vital to keeping their markets afloat and creating jobs.

Although climate change legislation would provide a huge shot in the arm for these industries, solar- and wind-farm developers say they have a more urgent need: a proposal to extend a government program that provides cash grants to developers in lieu of tax credits. Energy-efficiency, construction and building-materials industries are pressing for passage of a bill that would provide rebates to homeowners who make energy-efficiency improvements. Together, the proposals would boost renewable energy development and conservation--important components of a climate plan--but they're being touted as important job creators at a time when Americans desperately need work.

The renewable-energy grant program, created by the 2008 Recovery Act, has been widely credited with keeping the
U.S. renewable-energy market solvent after the financial crisis wiped out most sources of project financing on which developers had depended. Other Recovery Act programs, like expanding the Department of Energy's loan guarantee program, also have boosted renewable energy development. But the cash grant program is the most vital, and extending it past 2010 is key to ensuring that new wind and solar farms will continue to be built across the U.S. , developers say.

"I think it would come very close to breaking the market if it's not extended," said Tom Doyle, president of solar-power development at NRG Energy Inc. (NRG), one of the largest
U.S. independent power producers.

Companies with innovative technologies--like solar-thermal power developer eSolar Inc., which is partnering with NRG on some solar farms--are particularly vulnerable if the grant program isn't extended, Doyle said. Larger developers like NRG could proceed with projects currently planned, although they would cut back on future projects, while smaller developers could lose projects currently under development, he said.

Uncertainty about whether Congress will extend the tax-credit grants before the program ends this year could make it difficult for some developers to obtain financing, said Arno Harris, president of solar-power developers Recurrent Energy.

"It introduces a ton of doubt about where earlier-stage projects are going to find financing and it causes us to become less bullish about developing those projects," Harris said. "What the industry needs is a long-term stable view that encourages continuity."

Senate Majority Leader Harry Reid (D., Nev.) supports an extension of the grants, an aide said. While no bill has yet been introduced, developers say they expect the provision to be included in a forthcoming clean-energy jobs bill.

"Here's a program that's working, that's created a business in 2009 and 2010, is actively creating work and jobs and has...close to no cost," said Julie Blunden, a vice president at solar-panel maker and developer SunPower Corp. (SPWRA).

The
U.S. solar-power market grew nearly 40% in 2009 and developers credit the cash-grant program as a key factor. In California , the largest U.S. solar market, the grant program is driving massive growth in the commercial rooftop solar market, as companies rush to apply for grants and rebates ahead of the Dec. 31 deadline. California businesses filed applications last month for rebates on more than 90 megawatts of solar projects, almost quadruple the average monthly amount.

Meanwhile, the House of Representatives passed a bill last week that would make $6 billion in government rebates available for people who make home improvements designed to cut their energy use. President Barack Obama strongly supports the bill, which also needs Senate approval.

Proponents of the measure, called Home Star, estimate that 3 million homeowners would take advantage of the program and save $9.2 billion in energy costs over 10 years. They also say the program would create 168,000 jobs, primarily in the construction industry, which has been hit hard by the recession.

"It's fundamentally a jobs bill," said Matt Golden, president of Recurve, a company that retrofits homes with energy-efficient materials. "Clearly, we get the long-term environmental and climate benefits, but what's driving the Home Star bill is the unemployment crisis."

Golden noted that while overall
U.S. unemployment is at 9.9%, unemployment in the construction industry is more than 20%.

The Home Star program includes a Silver Star program that would provide up-front rebates of up to $3,000 for installing energy-efficient appliances, windows, doors, insulation and other specified energy-efficiency improvements. A Gold Star program would provide up to $8,000 for improvements that cut a home's energy use more than 20%, often referred to as a whole-house retrofit.