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Will Debt Deal Derail Solar?

08/02/11

  04:12:00 pm, by Jim Jenal - Founder & CEO   , 334 words  
Categories: Solar Economics, Solar Tax Incentives

Will Debt Deal Derail Solar?

The just signed debt deal is about to create the greatest competition for federal budget dollars ever seen. How will that impact renewable energy in general and solar power in particular? The exact answer is still anyone’s guess, but if the predictions in a recent Politico article are accurate, the future is far from rosy for solar tax credits.

will commercial solar projects lose their tax credits due to debt deal?As most folks know, Congress approved and President Obama signed a debt deal that raised the so-called debt “ceiling” - thereby preventing the federal government from defaulting on its obligations - but requiring off-setting spending cuts.  In the short term solar tax credits came through unscathed.  That’s the good news, and that will likely last through the end of this year.  But a “Super Committee” will be created to put forward a host of new measures to cut the deficit by an additional $1.5 trillion over the next ten years.  Since Republicans refuse to consider revenue increases, where will the necessary cuts fall?

The Politico article quotes Republican strategist Mike McKenna who says:

“They’ve set up a structure in which the Republicans are going to have maximum incentive to blow up loopholes and credits because the other choice is to cut defense,” he said. “So this is where all the mayhem on energy tax credits is going to get done.”

Oil and gas subsidies would also be potentially on the chopping block - but there can be no doubt that those industries will have much more money to spend to preserve their decades-old tax favors.

President Obama and Energy Secretary Chu have previously voiced strong support for federal incentives to spur on renewable energy sources, including solar.  The question is, when push comes to shove, will they and the other supporters of renewables have the political will to save those programs from the budget axe?  Given that Spring has turned into Summer which is headed rapidly toward Fall with no sign of a promised solar power system showing up on the White House, solar fans are apprehensive, at best.

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1 comment

Christof
Truly depressing. Those with the most power and money – defense contractors, oil companies, etc. – win, and, quite literally, everyone else loses, though I have a feeling that EV credits will stay (if only because pro-nuke Republicans want more EVs plugging in to nukes). The biggest mystery to me: Why so many working class/blue collar Americans buy into Republican Tea Party rhetoric. I guess it’s because Repubs align with the conservative cultural and religious mores of working class Americans. Might also be because those at the economic bottom believe that they, too – each and every one of them – will some day become a Bill Gates, and damned if when that happens (it won’t), they want the Gov. handing over millions of their tax dollars to “tree huggers".
08/02/11 @ 21:56


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Jim Jenal is the Founder & CEO of Run on Sun, Pasadena's premier installer and integrator of top-of-the-line solar power installations.
Run on Sun also offers solar consulting services, working with consumers, utilities, and municipalities to help them make solar power affordable and reliable.

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