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The House of Representatives has just passed what may be the largest bit of renewable energy legislation in the history of the world. Over the next eight years, this 30% tax credit for solar energy will create 440,000 permanent jobs, 35 gigawatts of renewable electricity, and foster the growth of a $300 billion market for solar energy.
So I guess I was being too cynical when I wrote last week that I thought the 8-year extension of the Solar Investment Tax Credit was going to stall out in the House because the bailout package would eat all of this session's remaining time. In the end, they just stuck the legislation into the bailout package, and it passed.
For those of you complaining about the DOE's measly $17M investment in solar companies earlier this week, this should please all, since it's going to pump billions of dollars into the solar industry.
The bill does a few things:
- Extends for 8 years the 30-percent tax credit for both residential and commercial solar installations
- Eliminates the $2,000 monetary cap for residential solar electric installations, creating a true 30-percent tax credit (effective for property placed in service after December 31, 2008)
- Eliminates the prohibition on utilities from benefiting from the credit
- Authorizes $800 million for clean energy bonds for renewable energy generating facilities, including solar
The bill has been widely touted as a win-win for America, but congress struggled for over two years to pass because they couldn't figure out how to pay for it. General Electric has said that the tax credit will more than pay for itself by encouraging companies to spend money and grow the solar industry. Several companies vowed to leave the United States entirely, and move their operations elsewhere, if the bill was not passed.
By the time this tax credit expires in 2016, the solar industry (and EcoGeek) expects solar power to be the least expensive form of energy. And without the heroic actions of the House of Representatives today, this simply would not have happened.
So yes, this is big frikkin' news...and very exciting. For the full press release from SEIA keep reading.
Federal Solar Tax Credits Extended for 8 Years, US Poised to Become Largest Solar Market in the World
Industry Leaders Forecast Dramatic Growth in the U.S. Solar Market by 2016 with Extension of Credit
WASHINGTON – Today, by a vote of 263-171 , the U.S. House of Representatives passed historic legislation that extends the 30-percent federal investment tax credit for both residential and commercial solar installations for 8 years. This landmark legislation is part of H.R. 1424, the Emergency Economic Stabilization Act of 2008, designed to address the U.S. financial crisis. It is the most significant federal policy ever enacted for the solar industry. President Bush has vowed to sign the bill into law. The Senate passed the bill on Wednesday night.
“This bill is a major step in our long journey toward energy independence and ensures that solar energy will be a significant part of America’s energy future,” said SEIA president Rhone Resch. “This long-term extension of the solar tax credits will create a domestic solar industry with hundreds of thousands of jobs while providing clean, affordable, carbon-free energy to millions of American families, businesses, and communities.”
“On behalf of the 60,000 Americans employed by the solar energy industry, we would like to thank Leaders Reid and McConnell and Senators Baucus, Grassley, Cantwell and Ensign for their dogged support of the solar tax credit extension. In the House we are thankful to Leaders Pelosi, Hoyer, Boehner, and Blunt, and Chairman Rangel, Ranking Republican McCrery and Rep. Camp among many others who have long worked to bring solar energy to the mainstream. These leaders have broken through partisan politics and have provided a bright future for solar energy in the United States,” said Resch
“By passing this bill, Congress has finally given the solar energy industry ‘policy certainty’ that will attract investment, expand manufacturing and lower the cost of solar energy to consumers,” said Roger Efird, SEIA chairman and president of Suntech America, a leading Chinese solar power manufacturing company. “This will allow companies like mine to move forward with expansion plans to serve the growing U.S. market.”
“This bill puts the sun to work for every American,” added Resch. “And by 2016, we expect solar energy to be the least expensive source of electricity for consumers.”
The solar investment tax credit (ITC) provisions will:
· Extend for 8 years the 30-percent tax credit for both residential and commercial solar installations;
· Eliminate the $2,000 monetary cap for residential solar electric installations, creating a true 30-percent tax credit (effective for property placed in service after December 31, 2008);
· Eliminate the prohibition on utilities from benefiting from the credit;
· Allow Alternative Minimum Tax (AMT) filers, both businesses and individuals, to take the credit;
· Authorize $800 million for clean energy bonds for renewable energy generating facilities, including solar.
The solar tax credits were originally enacted in the 2005 and have created unprecedented growth in the U.S. The amount of solar electric capacity installed in 2007 was double that installed in 2006.
“Over the last 2 years, these tax credits have turned the solar industry from a small, cottage industry into an economic engine for America. Electricians, plumbers, roofers and construction workers can now get back to work. These jobs are the backbone of the American economy and the solar industry is creating them at a time when they are needed the most,” said Resch.
According to a new economic study by Navigant Consulting, Inc., the 8-year extension of the ITC will create 440,000 permanent jobs and unleash $325 billion in private investment in the solar industry. This study did not factor in elimination of $2,000 monetary cap on the residential credit, so the actual job creation and investment could be even greater.
“This is a big boost for the residential market in particular, allowing homeowners to contribute to our nation’s energy independence,” said Efird. “It also opens the floodgates for building large, utility-scale solar power projects that need longer timeframes to complete.”
To date, there are 27 such utility-scale solar power projects totaling 5,400 megawatts of power in various stages of development; most were on hold due to uncertainty surrounding the expiring tax credits.
Because solar energy components are manufactured near their markets, this extension will create manufacturing and installation jobs in all 50 states. The states that will enjoy the largest economic boost are California, Florida, Arizona, New Mexico, Nevada, New Jersey, Massachusetts, New York, Oregon, and Washington.
Similarly, the economies of Pennsylvania, Michigan, Ohio and the rest of the Great Lakes region will grow significantly as a result of the extension. This area of the country has suffered greatly from a huge decline in jobs in the automotive and traditional manufacturing industries.
According to the same study, more than 28 gigawatts of electricity will be produced from solar energy by 2016 – enough to power more than 7 million homes.
“Success has not come easy. It required a strategic campaign that included dedicated SEIA staff, a committed board, and active membership all focused on one goal. It took seven votes in the House and 10 votes in the Senate, but in the end, Congress came through. This effort has established SEIA as a major energy player on Capitol Hill,” said Resch. “We have a lot of opportunity in front of us and will be back next year to work on critical issues such as transmission infrastructure, renewable electricity standards, and combating global warming.”
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written by jim, October 03, 2008
I guess I should have waiting to get my home solar panels installed this year. I only get the $2000 cap before the bill was passed. I guess if everyone waits, there will always be a reason to put it off.
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written by Brendon, October 03, 2008
Good to hear. According to a recent NYTimes article, global CO2 production is about 2 percent of the total atmospheric mass of CO2 annually. Natural CO2 sinks, forests and oceans, are sequestering about half of that, but that still leaves atmospheric CO2 increasing 10 percent every ten years, which is significant. At the same time, excess CO2 becomes carbonic acid in the ocean, making it more acidic and damaging organisms. Industrial CO2 can be sequestered, but automotive and transportation generated CO2 has nowhere to go but the atmosphere, and I doubt that we'll be able to create a carbon sink that can soak up as much as the world's oceans. In other words we need to hurry it up.
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written by Jeffrey Castaline, October 03, 2008
I got estimates from some solar installer companies this year, and all of them pushed their product by saying,"If you don't buy now, you'll never get the credit again." Now with the bill passed today, the credit conditions are better.
How do I find a quality, fair priced company to install a system for me in San Mateo, CA?
How do I find a quality, fair priced company to install a system for me in San Mateo, CA?
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written by tom konrad, October 04, 2008
The AMT exemption, mentioned in the SEIA release, but not highlighted in your article, is probably more important than the clean energy bonds. The AMT exemption means that tax payers who are subject to the AMT can now benefit from the ITC. This is a big deal, since it means that many more companies and indivauals can benefit, and there is a borader pool of tax equity investors for large scale solar projects.
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written by Ray The Money Man, October 04, 2008
Let's keep government out of this and invest directly into alternative energy ourselves. Just like the oil industry did in the beginning. We can invest our way out of this. But we'll never get the government out of it.
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written by geopix, October 04, 2008
government has been involved in every major business development, this is a terrible argument, that is misleadingly broadcast all the time. Think of the the infrastructure that is in place for oil. To utilize solar and wind, there have to be large changes in infrastucture, more importantly solar has to compete against entrenched energy forms. thisis not a level playing field.
for the individual as well, this is a very different approach, requiring large long term capitol investment, we have to move our plug and play culture from energy renters to energy owners. We need government to help people and business plan long term.
for the individual as well, this is a very different approach, requiring large long term capitol investment, we have to move our plug and play culture from energy renters to energy owners. We need government to help people and business plan long term.
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written by Will Johnston, October 05, 2008
Can someone explain to me the meaning of the cap? Does this mean that if I do my own home solar installation for less than $2k, I can't get a tax rebate or deduction?
Will Johnston
www.growandmake.com
The Store for Sustainable Living
Will Johnston
www.growandmake.com
The Store for Sustainable Living
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written by Susan Kraemer, October 05, 2008
No, it was that before, if a homeowner spent over $2000 on solar roof, they would only be reimbursed up to $2000 max.
The original legislation was to reimburse 30% of the cost. Then it was amended in 2003 - they left in the 30% for commercial buildings but restricted homeowners only up to $2000, assuming you could get a solar roof for $6000. It was ridiculous!
The original legislation was to reimburse 30% of the cost. Then it was amended in 2003 - they left in the 30% for commercial buildings but restricted homeowners only up to $2000, assuming you could get a solar roof for $6000. It was ridiculous!
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written by audi, October 05, 2008
Could this be the wakening of the 'Sleeping Giant' again? It's no doubt that America would be leading the world in renewables if ye weren't so addicted to oil. Hopefully that dependency is breaking.
Does anyone think that this could be the next investment bubble - not that it would be a bad one? Today in Europe we have Germany joining Ireland in 'bailing out' our banks... so what? Inflating a bubble in another part of the economy will take the pressure of the one which is putting our tender parts in a vice.
Lurch from bubble to bubble - at least some use could come from this one.
Does anyone think that this could be the next investment bubble - not that it would be a bad one? Today in Europe we have Germany joining Ireland in 'bailing out' our banks... so what? Inflating a bubble in another part of the economy will take the pressure of the one which is putting our tender parts in a vice.
Lurch from bubble to bubble - at least some use could come from this one.
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written by Susan Kraemer, October 05, 2008
By definition, a bubble is something non essential...tulips, online dogfood, too-expensive mortgages, that sort of thing...investors get all excited but, honestly, they could have seen that these were not essential investments.
On the other hand, until we get our climate altering emissions under control, this actually is the most essential investment we have had in our 200,000 year history, so...
not a bubble, for at least another 50 years.
On the other hand, until we get our climate altering emissions under control, this actually is the most essential investment we have had in our 200,000 year history, so...
not a bubble, for at least another 50 years.
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written by Ken Roberts, October 06, 2008
A bubble can be in anything. It simply means that demand is temporarily inflated, boosting market price well above the long-term equilibrium.
There may well be a green bubble, who knows? On a related note, it was the Tech bubble of the 90's that was responsible for much of our current boom. Not in the sense that you're thinking, but in the many miles of fiber optic cable that were laid by Tech companies who later went bust. There was a vast oversupply over fiber optic cable for years, causing broadband prices to plummet.
There may well be a green bubble, who knows? On a related note, it was the Tech bubble of the 90's that was responsible for much of our current boom. Not in the sense that you're thinking, but in the many miles of fiber optic cable that were laid by Tech companies who later went bust. There was a vast oversupply over fiber optic cable for years, causing broadband prices to plummet.
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written by Ken Roberts, October 06, 2008
To geopix,
You don't need government involvement to balance the industries, that's a ridiculous claim. Cell phone companies didn't need subsidization to defeat entrenched land line companies, and innumerable other examples.
All that is needed is for the neighborhood effect (externality) of pollution to be accounted for in market decisions. That's it. The market will take care of the rest, as long as the law is stable. The best way to do this, in my opinion, is to tax pollution.
You don't need government involvement to balance the industries, that's a ridiculous claim. Cell phone companies didn't need subsidization to defeat entrenched land line companies, and innumerable other examples.
All that is needed is for the neighborhood effect (externality) of pollution to be accounted for in market decisions. That's it. The market will take care of the rest, as long as the law is stable. The best way to do this, in my opinion, is to tax pollution.
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written by brian, October 07, 2008
i just got solar panels installed on my roof last week. does this help me in any way? does my tax credit go up? or would it only have gone up if i waited?
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written by Kurt, October 10, 2008
As per the article above:
Eliminates the $2,000 monetary cap for residential solar electric installations, creating a true 30-percent tax credit (effective for property placed in service after December 31, 2008)
:(
I know that burns those who took the initiative to invest early on and help the industry.
I imagine costs per panel will reduce somewhat as the next few years go by as well.
Eliminates the $2,000 monetary cap for residential solar electric installations, creating a true 30-percent tax credit (effective for property placed in service after December 31, 2008)
:(
I know that burns those who took the initiative to invest early on and help the industry.
I imagine costs per panel will reduce somewhat as the next few years go by as well.
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written by David, October 10, 2008
Brian,
Have you completed your interconnect? If not, hold off to until 01/01/09. I believe that is when your system is considered to to placed in service.
For the true experts, am I correct?
Have you completed your interconnect? If not, hold off to until 01/01/09. I believe that is when your system is considered to to placed in service.
For the true experts, am I correct?
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written by curious, October 10, 2008
This is nice, but with today's economy, who is going to be able to afford to pony up $20,000 for a system?
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written by Christopher Booth, October 14, 2008
Installing in solar panels is a less risky investment than the stock market. With a 30% tax credit they pay for themselves in less than 10 years and you get another 10 to 20 years of free electricity.
Won't it be funny 30 years from now when people are complaining about the solar lobby, a Trillion dollar/year industry, instead of the oil lobby? We really need to eliminate private finance contributions, including from the candidate, through an amendment to the constitution, at the same time eliminating the electoral college and requiring a run-off election if no candidate gets 50% of the vote.
Won't it be funny 30 years from now when people are complaining about the solar lobby, a Trillion dollar/year industry, instead of the oil lobby? We really need to eliminate private finance contributions, including from the candidate, through an amendment to the constitution, at the same time eliminating the electoral college and requiring a run-off election if no candidate gets 50% of the vote.
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written by Pennamale, October 16, 2008
There is one point everyone is missing. To truly save on emmissions we must cut usage. Windmills and solar are OK but the capital cost per KW is highest of all sources. Nuclear, coal and gas turbines is less expensive. IMPORTANT on a windless night all electricity must be generated by fuels. So for every $ spent on wind and solar the same amount must be spent on backup.
Wind, solar, hydro and nuclear only lower emissions. THE BIG CO2 fraud.
The earth receives more solar energy in one day than is made by mankind in all his ways.
Someone prove that air polution on a global scale will incre3ase temp. Historically air polution lowered temp worldwide.
Wind, solar, hydro and nuclear only lower emissions. THE BIG CO2 fraud.
The earth receives more solar energy in one day than is made by mankind in all his ways.
Someone prove that air polution on a global scale will incre3ase temp. Historically air polution lowered temp worldwide.
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written by OmegaVector, October 16, 2008
How vulnerable are solar panels to an EMP attack? Would the solar panels get fried since they are semi-conductors? Would all investment in solar be lost after an EMP attack? Can solar panels be hardened against EMP attacks?
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written by sfsolar, October 21, 2008
I'd like to see all the people who invested in Solar this year (2008) be able get the benefit of this 30% tax break. We were all told to buy now before the credit disappeared. We are hurting today.
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written by Ron Staton, December 02, 2008
I too installed in 2008 and only get the $2000 tax credit cap. If I had waited until 2009 I would have recieved an additional $9000 in tax credits! I emailed both my congressman and my senator here in Arizona about grandfathering in us who took the plunge early. I doubt it will help but if enough of us do this maybe we can have some influence.
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written by randysta, December 08, 2008
Wow, I didn't realize the cap removal was in the bailout package. With the tax credit cap removed, I wonder if it can now pay for itself here in Portland, Oregon. Anyone know?
I was seriously looking into installing solar panels a year ago, but by my rudimentary calculations for this area (sun,tax breaks,elec rates,lifetime), it looked like I'd have to be able to get a system installed at less than $2 per installed Watt to break even. Naturally, I decided against it. I also was hoping someday our Gov't would come to it's senses and figure out it's cheaper to buy us all solar panels and use our existing electric grid to power America, than finance wars for oil. Probably cheaper than nuclear plants too. The cap removal sure helps.
Does anyone know if there are even panels available now for residential at less than $2 per installed Watt?
I was seriously looking into installing solar panels a year ago, but by my rudimentary calculations for this area (sun,tax breaks,elec rates,lifetime), it looked like I'd have to be able to get a system installed at less than $2 per installed Watt to break even. Naturally, I decided against it. I also was hoping someday our Gov't would come to it's senses and figure out it's cheaper to buy us all solar panels and use our existing electric grid to power America, than finance wars for oil. Probably cheaper than nuclear plants too. The cap removal sure helps.
Does anyone know if there are even panels available now for residential at less than $2 per installed Watt?
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written by Vikram, June 19, 2009
Hi All.
Bought a house recently and the roof is due to be replaced. One possibility is a solar shingles. Have any of your tried it? How does the cost ($/sq ft) compare with a traditional shingle roof? I do see from the article above that there is 30% tax credit which is great. Also, where do I start to consider which kind of solar shingles we should get and how much will it cost?
Thanks!
Vikram
Bought a house recently and the roof is due to be replaced. One possibility is a solar shingles. Have any of your tried it? How does the cost ($/sq ft) compare with a traditional shingle roof? I do see from the article above that there is 30% tax credit which is great. Also, where do I start to consider which kind of solar shingles we should get and how much will it cost?
Thanks!
Vikram
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written by queue management system, November 16, 2009
i think solar tax is great, but i don't know when this tax can be popular in the world
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It is not that they couldn't figure out how to pay for it though, it's that Republicans in the Senate have refused to let it past the 60 votes-cloture vote each time it came up.
The oil industry funding difference between Democrats and Republicans is pretty stark, and the Senate Republicans always vote against clean energy, except Snowe, Smith, Coleman and Collins. Add those 4 to 51 Democrats and we were always short of the 60 votes needed to get bills past cloture.
So a bill would pass in the House, but then not make it through the Senate, or back for the final version.
The Senate tax writer Baucus cleverly saw that actually, bailout failure improved the energy bill's chances because it gave the Senate one last must-pass bill to stick it on when sending it back, so it was the chance to attach it to the second try of the bailout as the Hail Mary pass that it has turned out to be.