The government released guidelines Thursday for allocating stimulus money to renewable energy projects, a move expected to help kick-start an industry dragged down by the recession.

The guidelines from the Treasury and Energy departments detail how developers can apply for grants to finance up to 30 percent of wind farms, solar plants, biomass facilities and other renewable energy operations.

Manufacturers, investors and project developers have said the government money is key because the renewable energy industry has struggled to obtain financing amid the credit market crisis.

"The industry is pumped about this announcement. This is exactly what we needed in terms of helping provide near-term financing," said Denise Bode, president of the American Wind Energy Association trade group.

"This (money) doesn't have to go through the financial community. This goes right to the developer," she said in a telephone interview.

The government will issue direct payments in lieu of tax credits to qualified companies that build and start renewable energy operations beginning Jan. 1.

About 5,000 facilities are expected to benefit from the direct payments, which should total about $3 billion, the agencies said.

The stimulus package also includes loan guarantees and tax incentives for renewable energy.

Renewable energy provides a small fraction of electricity used today but the wind and solar sectors are among the fastest growing in the United States.

In 2008, the U.S. added 8,358 megawatts to become the world's leading provider of wind power. Bode expects the industry to add about 6,000 megawatts of wind-generated electricity this year.

Yet, the recession has taken a toll. Companies have shelved plans for wind farms, solar parks and biofuels plants. Some have laid off workers while others have been forced to seek bankruptcy protection.

Most analysts agree business will pick up later this year or in 2010.