Federal ITC for Green Energy

Saint Cyril Church in Encino, CA where 150 Mitsubishi 185 modules were installed by HelioPower.

SEPA Statement on Historic 8-Year Solar Tax Credit Extension

Removal of Utility Prohibition to Have Major Impact on Solar Market Development

WASHINGTON, D.C. – The passage of H.R. 1424, the Emergency Economic Stabilization Act of 2008, provides critical news for the solar industry at large, but also for regulated electric utilities looking to diversify their energy mix with solar electric generation. In addition to extending the federal solar investment tax credit (ITC) for 8 years, the legislation includes the removal of a prohibition that previously prevented electric utilities from taking advantage of the credit.

Based on announcements and discussions with utility executives this year, the Solar Electric Power Association (SEPA) predicts that utilities will quickly become the largest and one of the most important customers for the solar industry, expanding solar markets beyond analysts’ expectations.  Access to the federal tax credit will expedite the timeframe and scale to which this happens.

“U.S. electric utilities’ engagement with grid-connected solar electricity has increased significantly in 2008, with major photovoltaic and concentrating solar thermal project announcements totaling more than 5,000 megawatts,” said Julia Hamm, SEPA executive director.  “Without the ability to take direct advantage of the ITC, the only viable financial option was to have these plants be owned and operated by independent power producers who then in turn sell the electricity to the utility.  The change to the tax credit facilitates utility ownership as another option, which will result in additional projects and innovations.”

With the policy change, utilities that have a tax appetite and an interest in owning solar generation projects now have an added incentive to diversify and clean their energy supply with the addition of solar power. 

“This is a very positive development for the utility industry as it will go a long way to putting solar power within reach of many more Americans,” said Jim Rogers, chairman, president and CEO of Duke Energy, a SEPA member.  “It is exactly what we need as we explore investing $100 million to install, operate, maintain and dispatch solar panels on our customers' rooftops in North Carolina as a viable option to build a bridge to a low-carbon future.”

“The extension of the tax credit also significantly increases the likelihood that recently announced solar projects will come to fruition,” says Hamm.  For example, the largest planned photovoltaic projects in history – one for 550 MW and the other for 250 MW – announced as long term contracts with private solar companies in August by Pacific Gas and Electric Company, were both contingent upon the extension of the federal investment tax credit.

The full list of the solar investment tax credit provisions in H.R. 1424 include:

·         Extension for 8 years of the 30-percent tax credit for both residential and commercial solar installations

·         Elimination of 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)

·         Elimination of the prohibition on utilities from benefiting from the credit

·         Allowance for Alternative Minimum Tax (AMT) filers, both businesses and individuals, to take the credit

·         Authorization of $800 million for clean energy bonds for renewable energy generating facilities, including solar

Resources:

SEPA Top Ten Utility Solar Integration Rankings:

http://www.solarelectricpower.org/docs/Aug%204%20Top%20Ten%20Final%20revised.pdf

H.R. 1424 Bill Summary:
http://seia.org/galleries/pdf/HR_1424_Solar_Memo.pdf  

H.R. 1424 Full Bill Text:
http://www.solarelectricpower.org/docs/Fin_Stab_Bill_Text.pdf

As part of the Economic Recovery Bill, the Federal Incentive Tax Credits supporting the expansion of solar, wind and other sustainable energy technologies in the United States was passed today on the Hill. 

Breaking news from the Wall Street Journal…"House Passes Bailout Bill on Second Try:"

U.S. House of Representatives lawmakers wary of growing signs of the nation's economic distress voted in favor of a $700 billion Wall Street rescue package on Friday, sending the biggest government intervention in the financial markets since the Great Depression to President George W. Bush for his signature.

From RenewableEnergyWorld.com…"Tax Credits Pass: Renewable Energy Industry Breathes Sigh of Relief:"

After a disastrous few weeks on Wall Street, the renewable energy industry has come out a winner. It seems there's always a silver lining in even the worst developments.

Breaking news, Wednesday, September 24, 2008 from RenewableEnergyWorld.com: "US Senate Passes Renewable Energy Tax Credits, House Could Pass Bill This Week:"

HelioPower commercial installation for Dos Molson in Poway, CA

The United States Senate on Tuesday voted by an overwhelming majority to extend the Production (PTC) and Investment Tax Credits (ITC). The tax measure was passed by a vote of 93-2. Now it goes back to the U.S. House of Representatives where it could be approved later this week.

Under the legislation, the PTC will be extended for one year and the ITC will be extended for eight years. The extensions would be at least partially paid for by a change in the tax code for the oil and gas industry. The bill also contains removal of the US $2,000 cap for residential solar installations. The US $18 billion package is part of a larger tax bill worth approximately US $148 billion.

Breaking news in from Business Wire, September 18…"Clean Energy NOW:Diverse Coalition Calls on Congress to Extend Clean Energy Tax Incentives"

Speakers that span the political spectrum, representing the Clean Energy NOW coalition of more than 200 organizations, joined forces today to call for Congressional action to extend the renewable energy and energy efficiency tax credits before the conclusion of the September legislative session. While the credits are set to expire at the end of the year, this week the Senate Finance Committee announced an energy tax deal–agreeing to an $18 billion package which includes clean energy tax incentives. The full Senate is expected to vote on the measure in the next several days.

"Today, the wind industry is experiencing record growth, and hiring new workers every day," said Randall Swisher, Executive Director of the American Wind Energy Association (AWEA). "Unfortunately, many of those newly created jobs are now at risk, and urgent bipartisan action by Congress is needed to sustain the momentum of this growing clean energy industry." According to a recent study by Navigant Consulting, failure to promptly extend the renewable energy tax incentives places at risk 116,000 jobs in the wind and solar industries and more than $19 billion in clean energy investment.

Moynier Vineyards, HelioPower installation using Mitsubishi 185 modules in Winchester, CA

Late last night, the U.S. House of Representatives passed H.R. 6899, a bill that contains extensions for the Production and Investment Tax Credits (PTC and ITC) for renewable energy, by a vote of 236-189.

H.R. 6899 which reportedly will not receive any consideration in the U.S. Senate, contains a one-year extension of the production tax credit for wind energy, a three-year extension of the production tax credit for biomass, geothermal, hydropower, landfill gas and waste-to-energy systems. It also contains an eight-year extension of the commercial ITC for solar energy and fuel cells and raises the cap for the residential energy-efficient property credit from US $2,000 to US $4,000.

According to sources close to the legislative process, the Senate has reached consensus on a different bill that also includes extensions to the PTC and ITC and could vote to pass the Senate version of the bill later this week. Senate Finance Committee Chairman Max Baucus (D-MT) and Ranking Member Chuck Grassley (R-IA) made the announcement yesterday.
 
The agreement includes ITC and PTC extensions with a total value of approximately US $17 billion, paid for in part by freezing the tax deduction for the domestic manufacturing activities of American oil and gas companies and tightening the rules by which oil and gas companies pay taxes on income earned overseas and freeing general fund monies with increased payments into the oil spill liability trust fund as new drilling is considered.  Other pay-fors include a one-year extension of the Federal Unemployment Tax Act surtax at the current level and increasing reporting requirements for brokers on sales of stock.
 
This agreement, which has been under development for the last week includes an 8-year extension of the commercial ITC, a 2-year extension of the residential ITC, removal of the cap for the residential energy-efficient property credit, a one-year extension of the wind energy PTC and a three-year extension of PTCs for all other qualifying facilities.

Breaking news from Dow Jones' reporter, Cassandra Sweet: "Renewable Power Indus Hopes For Tax Credit Extension" For the full article click here.

SAN FRANCISCO -(Dow Jones)- Renewable power companies could take a hit if crucial federal tax credits set to expire Dec. 31 aren't renewed before Congress adjourns next week for elections.

The U.S. House of Representatives approved an energy bill late Tuesday that includes a one-year renewable tax credit extension for wind power and an eight- year extension for solar power. The measure includes provisions for expanded offshore drilling for oil and natural gas and a tax hike for oil and gas production that would pay for the renewable tax credits.

In the Senate, Democrats and Republicans reached a deal Tuesday on tax legislation that would extend the renewable tax credits. The credits would be partially paid for by increased taxes for oil and natural gas production. Due to scheduling of other bills, the Senate is unlikely to vote on the measure until next week.

Congress adjourns on Sept. 26. It may not reconvene this year.

Keeton Construction, Temecula, CA by HelioPower

From the PR Newswire today, 9.15.08: "If Congress Passes Bill, 440,000 permanent jobs will be supported by the U.S. solar energy industry by 2016."

From Vote Solar today…

Today, the Senate comes back from their summer vacation.  And today, we are visiting every Senator to remind them that unless they get the job done on extending the solar investment tax credit, America's clean energy workforce will be going on a 'vacation' of another sort.  We are going to deliver a green hard hat – symbolizing the more than 100,000 solar and wind jobs that could expire with the tax credits in December – to every office.

Will you contact your Senators to ask if they received the green hard hat, and ask them to work to end the stalemate and put clean energy to work?

Click here for directions to contact your Senators.