Solar, Wind Stocks to Ride Tax Cut Tailwind

(Solar, wind cash grant, tax cut story, updated with details of extender)

WASHINGTON D.C. (TheStreet) -- The pet legislative project of the solar and wind industries -- the Treasury cash grant program that was set to expire at year-end -- made it into the massive tax cut legislation. Senate Majority Leader Harry Reid unveiled the package late on Thursday, and one of the sweeteners included is the extension of the Section 1603 cash grant program that originated in the financial crisis stimulus legislation.

The news wasn't a big surprise, as comments by key senators on Thursday afternoon indicated that the cash grant program was back in, though it did mark a comeback for a lobbying effort for the wind and solar industries which some watchers thought was doomed when it wasn't included in the tax cut legislation package introduced earlier this week and negotiated by the White House and Congress.

>>Solar, Wind Cash Grants: Not Dead Yet

Both the solar and wind industry have spent the past year lobbying to convince Congress to extend the cash-grant program for renewable energy projects.

As previously detailed on TheStreet, the cash grant program is big business for the solar and wind industries. It wasn't just the solar and wind industries' trade groups pleading for a last gasp inclusion in the tax cut package, but the National Venture Capital Association, as well as progressive think tanks like the Center for American Progress, key Democratic Senators, including Sen. Dianne Feinstein (D-Calif.) and Washington Senator Maria Cantwell.

Feinstein noted in an op-ed piece on Thursday fighting for an extension of the cash grant program and penned for Politico.com that the program "is rightly credited with maintaining growth in the renewable energy sector in the middle of an economic downturn. ... The program has, so far, supported roughly $18.2 billion in clean energy investment to build 8,600 megawatts of renewable energy generation, according to Feinstein's data.

Farm state Democrats also gained inclusion for a key ethanol incentive.

All the major U.S. solar companies have project pipelines which would benefit from the extension of the cash grant program, including Fist Solar(FSLR), SunPower(SPWRA) and MEMC Electronic Materials(WFR).

The loss of the cash-grant program would have had broad implications for all solar module and solar inverter companies as optimistic 2011 forecasts are being spun predicated on a much larger U.S. marketplace for solar installations. While the biggest of big projects will be able to secure financing without cash grants, the entire market size for solar -- and the ability for solar product suppliers to sell into the U.S. project market -- could have been significantly impacted by a lower overall number of projects able to secure financing.