Andrew, Reid may just have some kingly powers after all — he’s adding the 1603 program Sen. Sherrod Brown (D., Ohio) was demanding last night to the tax cut extension legislation, along with other green deals to help liberal lawmakers swallow the deal. From The Hill:

To win over wavering liberals, Reid has added an ethanol tax credit, which Sen. Tom Harkin (D-Iowa) supports, and an extension of the Section 1603 cash grant program for the renewable energy industry, which Sen. Sherrod Brown (D-Ohio) favors.
The package includes other green-energy incentives that could win support among House liberals, who are disappointed the Senate failed to take up a comprehensive energy reform and climate bill this year. They include tax credits for biodiesel and renewable diesel; energy-efficient homes; alternative fuels; and a 30-percent investment tax credit for alternative vehicle refueling properties.

Here’s an explanation of the 1603 program from the liberal think tank Center for American Progress:

The U.S. Treasury’s new Section 1603 cash grant program provided an alternative to the renewable energy production tax credit program that suddenly was useless amid the turmoil of the 2008-2009 financial crisis. Under the new program, renewable energy project developers who were eligible for the production tax credit but could not use it due to the crisis could instead elect to receive a cash grant for a similar value. This cash grant was critical for renewable energy development companies, particularly wind energy, and their employees and new job-seekers in the industry.
The reason: Many renewable energy developers, especially small or start-up firms, do not make any profit. If they don’t owe any taxes they are not eligible for tax credits. Before the financial crisis, however, these companies would sell the tax credit to a “tax equity partner,” typically a bank or some other large financial institution, which could use the tax credit to offset some of its taxable earnings. The renewable energy company would then use these funds to build the project. The financial crisis put an end to this model, as the tax equity partners disappeared, leaving developers with tax credits they could not use.
The cash grant program rectified this situation by providing the option of a cash grant in lieu of the tax credit. The cash grant program resulted in real dollars going directly to alternative energy developers as the economy struggled out of the Great Recession, but the actual cost to the government remained the same because the net cost of giving out a grant to a developer is the same as the cost of providing a tax credit to that developer.