Hopes for a clean-energy, low-carbon economy are looking a bit shaky in some parts of the world for 2011, although a controversial vote by the soon-to-be-replaced Congress provides some encouragement in the US.

Included within a legislative package that extends Bush-era tax cuts for the wealthy as well as benefits for the unemployed is a one-year extension of the Department of Treasury Section 1603 program, which provides cash — rather than tax credits — for renewable energy investments. Proponents of the program, which had been due to expire at the end of the year, say it has significantly boosted wind and solar projects that would have otherwise languished in the weak economy.

“With an extension of the 1603 program now in place, the solar industry can continue its record growth, creating new career opportunities for Americans in all 50 states in 2011,” said Rhone Resch, president and CEO of the Solar Energy Industries Association (SEIA).

The SEIA credits the program with helping the US solar industry grow by more than 100 per cent this year. It says the federal funds have supported $18 billion in solar energy investment and enabled more than 1,100 solar projects in 42 states.

Wind energy development has also benefited from the federal funds, with the wind industry now providing some 85,000 jobs across the US, according to the American Wind Energy Association (AWEA).

“With the industry expansion this extension will incentivise, we’re going to be making a whole lot more affordable, homegrown electric power in the years to come,” said Denise Bode, the association’s CEO.

The renewable energy grant funds were made available through the American Recovery and Reinvestment Act of 2009. Prior to that, the government offered only tax credits for wind and solar power developments, which did less to spur investment in an era of tight credit.

The grant program extension could prove even more critical in 2011 than in 2010, as much of the other 2009 stimulus funding is set to begin running out this spring.

Meanwhile, with austerity measures being enacted by many governments, other regions are also likely to feel a push-pull effect on low-carbon investments in the coming year. The UK, for example, has seen a spike in renewable energy development since the launch of its feed-in tariff this past April. However, the government outlined across-the-board spending cuts in its Spending Review this past October, and further reductions in science research budgets were announced just this week.

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