Capping off a day dedicated to climate change issues, the Obama administration had one final announcement in store: The Treasury Department released news that it is allocating $2.2 billion in bonds to support the efforts of 805 small-scale clean and renewable energy projects across the country.
As part of the federal stimulus package, and the Energy Improvement and Extension Act passed last year, these Clean Renewable Energy Bonds (CREBs) will be administered through public power providers, cooperative electric companies and municipal agencies to lower the financing burdens for clean energy developments. It will give them access to lower cost credit, which should help jump start the sluggish credit market in the sector and energy companies that were previously unable to afford a transition to renewables.
The bonds themselves function as tax credits. Investors in clean energy projects will receive returns in the form of federal tax credits instead of a slice of the bonds’ interest. CREBs are unique in that these federal tax credits will cover about 70 percent of the interest earned on the bonds.They define renewable energy as any source not involving fossil fuels.
Only a small handful of states will benefit from the bulk of the bond allocation. About $800 million of the total will be distributed by public power companies in California, Colorado, Illinois, Massachusetts and Washington. Cooperative electric companies in 17 states were tapped to receive some of the bond money, as well as government bodies in 17 states.
Most of the bond money will be used to support solar, wind and hydropower companies and projects. Only $200 million was set aside for biomass, mostly in Georgia, and $5 million was earmarked for geothermal.
For those really interested in the gritty details, here is a full list of the 805 initiatives receiving support through the bond initiative:
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