Tag: "federal solar subsidies"

11/17/16

  06:57:00 am, by Laurel Hamilton   , 342 words  
Categories: All About Solar Power, Solar Tax Incentives

Five Reasons the ITC Won't be Scrapped

At Run on Sun we don’t take partisan stances on politics. We believe everyone, regardless of politics, benefits from harnessing the unlimited resource of sun-powered PV systems. However, the recent election has raised questions about the future of federally-backed support for solar - specifically the federal solar investment tax credit (ITC). The short answer is, we are optimistic the current plan for the ITC to continue for three years at 30% then gradually sunset after five will be unaffected. Here’s why:

  1. CongressThe ITC is federal law. The President cannot change federal law by executive order without an act of Congress to change it.
  2. Congressional acts require 60 votes in the Senate. Policy decisions in Congress such as changing a tax law, require enough votes to overcome a filibuster. The post-election makeup of Congress would require bi-partisan support to pass any changes to the ITC. 
  3. Solar is good for the economy. The solar industry has proven to create local, living-wage jobs that cannot be exported. Everyone knows job-creation receives bi-partisan support.
  4. Solar has already received bi-partisan support. Leaders see solar not only as an environmental solution but an economic one, as well as an avenue for fuel independence. These reasons and more helped get the ITC extended last year by champions on both sides of the aisle.
  5. State and local policies will prevail. Regardless of what happens at the federal level we can count on state and local policy to continue to support a thriving solar industry in California and many other states where the benefits are undeniable.

The fact is, the ITC is federal law and laws are not easily changed. Even if it did somehow manage to be changed before the 5-year planned sunset, we are confident our state will step up to make sure adequate support continues to make solar an economically viable option for the public. Never fear! Solar is here to stay. 

(Thank you to CALSEIA and Executive Director Bernadette del Chiaro for the inspiration for this blog and for their invaluable efforts to advocate on behalf of the solar industry.)

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12/18/15

  03:42:00 pm, by Laurel Hamilton   , 578 words  
Categories: All About Solar Power, Solar Tax Incentives, Ranting, Solar Policy

Early Christmas from Congress! Solar Tax Credit Extended!!!

xmasToday is a great day for solar! The uncertainty around the ITC (federal solar tax credit) is finally over and we can all rest assured that the solar industry will not fall off a cliff come December 31, 2016! 

You may have heard the big news about the bipartisan passing of the year-end budget deal to effectively not shut down the government for one more year. But you may have missed the news that they also passed a 1.1 trillion dollar omnibus spending bill including the extension of many tax credits. Guess which exciting tax credit was included?? That’s right, the solar ITC and other renewable energy tax credits were included in HR 2029. The spending bill is the result of a deal between party leaders. The unfortunate cost of the five-year extension (and other Democratic priorities) is the lifting of the 40-year-old oil export ban and a series of permanent tax cuts. 

This morning HR 2029 passed the US House of Representatives (316-113) and the US Senate (65-33). This means that the Omnibus funding bill goes to the President for his final signature, which he has already agreed to do. This is a great day for the solar industry, living-wage American jobs, the growth of clean power and all the policy advocates out there fighting to extend the ITC. 

Here are the details regarding the new extension of the solar tax credit:

  • 3 year extension of the ITC at 30% extending until December 31, 2019
  • Step down to 26% in year ending December 31, 2020
  • Step down to 22% for year ending December 31, 2021 
  • Each year that a step down occurs has a start construction clause 
  • Continued 10% ITC for each year after…indefinitely? 
One key point is the change in language from requiring projects to be complete during a calendar year to the new ITC where projects must only be started in a calendar year to receive the credit. This helps relieve pressure on solar contractors racing to meet deadlines, particularly for large commercial scale solar projects. Another key point is that from what we can tell, the ITC will remain indefinitely at the 10% level after 2021. Perhaps this just means: “10% ITC until different legislation trumps the current bill." 
 
The Solar Energy Industries Association (SEIA) has been working overtime in the battle for the ITC extension. SEIA President and CEO Rhone Resch had the following to say about this historic vote: 

“We commend members of Congress in both parties for taking this bold step and we look forward to delivering on the promise that this policy now offers all Americans. Thanks to the ITC, solar energy will add 220,000 new jobs by 2020, and with this extension, the solar industry can achieve its pledge of employing 50,000 veterans. Clean solar energy will cut emissions by 100 million metric tons and replace dozens of dirty power plants.

Importantly, in the follow up to the Paris accord, this establishes the United States as a model for the reduction of greenhouse gases. A five-year extension of the ITC will lead to more than $133 billion in new, private sector investment in the U.S. economy by 2020. And much of this growth will come from small businesses, which make up more than 85% of America’s 8,000 solar companies.

Solar power in this nation will more than triple by 2020, hitting 100 GW. That’s enough to power 20 million homes and represents 3.5% of U.S. electricity generation.”

Today we celebrate the progress our country  has made. We know the tax extension will only serve to help more and more property owners take advantage of all the benefits of solar energy. Happy Friday and Happy Holidays everyone!!

09/27/11

  04:18:00 pm, by Jim Jenal - Founder & CEO   , 708 words  
Categories: All About Solar Power, Solar Economics, Solar Tax Incentives

Why Solyndra Just Doesn't Matter - Updated

1BoG infographic

UPDATE: The folks over at 1 Block Off the Grid have a great infographic that does a fine job of putting the Solyndra situation into perspective.  You should go check it out and then come on back here to see what we have to say.  Go ahead - check it out - we’ll wait!

Unless you have been hiding in a cave lately, you have undoubtedly encountered the media orgy over the collapse of solar panel manufacturer Solyndra.  Yet amidst much media hype - most of it driven for political gain - the fact remains that as to the overall solar industry, Solyndra just doesn’t matter.

Federal Subsidies for Solar

Much has been written about the so-called failure of federal solar subsidies in light of Solyndra’s $535 million dollar loan guarantee debacle. Indeed, some would go so far as to demand that all solar subsidies should be abolished.  To be sure, there are many, more reasoned voices explaining the error of such thinking, including at the NY Times, Time magazine, and the Washington Post, but the fact of the matter is that for most solar installations, loan guarantees play no role whatsoever.

Here is where federal money does assist solar power installations:

  • The 30% Federal Investment Tax Credit - this program allows for residential and commercial clients alike to take a tax credit worth 30% of the system cost against their taxes.  On a typical residential installation, that credit is worth anywhere from $4,000 to $12,000.

  • The 30% Federal Grant for Commercial Projects - commercial clients can (through the end of this year) elect to receive a grant in lieu of the tax credit making the 30% available immediately without regard for the client’s tax appetite.

  • Accelerated Depreciation - the final benefit is the ability of commercial clients to depreciate the value of the equipment on an accelerated schedule (100% in Year 1 for projects installed this year and five year depreciation for all other projects).

Collectively, these federal tax subsidies save residential clients thousands of dollars, and as much as 50% of the total system cost for commercial clients.  As a result, these subsidies play a part in every solar project installed in this country and they have gone a long way toward making solar more affordable, particularly during difficult economic times.  The money is distributed to all who qualify for it without favorites - mostly - and in terms of actual dollars, it represents a tiny fraction of the $$$ lavished on other players in the energy marketplace.

Taking the Fifth

Against that backdrop of how most solar projects operate in this country, the top executives at Solyndra just pleaded the Fifth Amendment in refusing to answer questions posed by a decidedly hostile House committee.  That is their right - enshrined in the Constitution, no less - and it does not mean that they are guilty of any wrongdoing.  (Indeed, the lawyer in me notes that it would constitute malpractice to let your client testify before such a committee while multiple investigations are in the works.)

But the optics are awful.

Add this sad display on top of solar’s pre-existing PR problems and it is clear that, once again, the solar industry is in for some harsh words and tough times.

What the Rest of Us are Doing

So what can the rest of us - who aren’t taking the Fifth but are actively promoting solar for our clients because we know that it is a great deal for them - do about this?  Plenty.  Here are some suggestions:

  • We can push-back against the madness with letters to the Editor or posted rebuttals to the arguments made by the fossil fuel industry (SEIA has some great talking points to help).  After all, not only is the future of solar at stake, but our children’s future as well.

  • We can encourage our clients - the folks who know best just what a great deal solar really is - to speak out and relate their experiences.

Solar is an exciting and dynamic industry and as such it has had and will continue to have winners and losers.  But Solyndra aside, the future for solar is bright, and for those of us at Run on Sun, there’s nowhere else we would rather be - join us!

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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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