Assisted by technology and years of subsidies, the cost of wind and solar power has fallen sharply - so much so that the two industries say they can sometimes deliver cleaner electricity at prices competitive with power made from fossilfuels.
At the same time, wind and solar companies are telling Congress they cannot be truly competitive and keep creating jobs without a few more years of government support.
Their efforts received a boost this week from President Barack Obama, who called for a package of tax credits for renewable power as part of a broader energy plan that he outlined while on a campaign swing through Nevada and Colorado.
But the lobbying by the wind and solar industries comes at a time when there is little enthusiasm for alternative-energy subsidies in Washington.
Overall concerns about the deficit have lawmakers more skeptical about any new tax breaks for business in general. And taxpayer losses of more than half a billion dollars on Solyndra, a bankrupt maker of solar modules that defaulted on a federal loan, has tarnished the image of renewable power in particular.
Solyndra was financed under a now-expired program, part of the 2009 stimulus package, that provided government loan guarantees for clean-energy projects, some of which administration officials expected to be risky.
The wind and solar companies argue the tax breaks they seek are different. The tax credits can be taken only by businesses that are already up and running, so taxpayers are less likely to be stuck subsidizing a failing company, proponents say.
"This is a program that doesn't pick winners or losers," said Rhone Resch, president and chief executive of the Solar Energy Industries Association. "It's hard to argue against a program like this that is creating jobs."
Without the new breaks, industry executives warn, they will be forced to scale back production and eliminate jobs in a still-weak economy.
The U.S. division of Iberdrola, a big Spanish producer of wind turbines, is already feeling the impending loss of one tax break that expires this year.
"We've seen the prospects for new wind farms really fall off," said Donald Furman, a senior vice president at Iberdrola Renewables, which announced this week that it was laying off 50 employees.
"We're not getting out of the business and we're not in any financial trouble, but we are doing the prudent thing so that we don't have issues."
The tax break that Iberdrola and other wind companies rely on, called the production tax credit, has been in place since 1992 but after repeated extensions is now scheduled to expire at the end of 2012.
The Congressional Joint Committee on Taxation recently estimated the production tax credit would cost the government $6.8 billion from 2011 to 2015 for projects in place before the end of this year.
The other tax break, which expired at the end of last year and was especially popular with solar companies, allows renewable energy companies to get 30 percent of the cost of a new project back as a cash grant once construction is complete.
Without the cash grant program, a company can still take the 30 percent credit but must spread the benefit over a period of years.
As of early this year, the cash-grant program, known as the 1603 program, had awarded $1.76 billion for more than 22,000 solar projects, according to the Treasury Department.
Wind projects surge
According to the American Wind Energy Association, wind projects account for more than a third of all the new electric generation installed in recent years, while over the past six years, domestic wind turbine production has grown twelvefold, to more than 400 facilities in 43 states.
A study by Navigant Consulting found that this year the industry would support 78,000 jobs, but that the number would fall to 41,000 in 2013 without an extension of the production tax credit.
Solar, too, is growing quickly in the United States. According to the Solar Energy Industries Association, more solar was installed in the third quarter of 2011 than in all of 2009 combined. A one-year extension of the 1603 tax-grant program would create an additional 37,000 solar industry jobs in 2012, according to a report by EuPD Research.
Republican leaders may look to revive the Keystone XL oil pipeline - as proposed, the pipeline would run 1,700 miles from oil sands in Canada to refineries on the Gulf Coast - as part of a compromise to approve the renewable energy credits, according to lobbyists and lawmakers involved in the discussions.
But there is much ideological opposition to more tax credits, said Sen. Jeff Bingaman, D-N.M., chairman of the Energy and Natural Resources Committee, who supports the extension.
"The rhetoric is that the government should get out of the way," he said. "That gets translated into opposition to a lot of these things."
