Tag: "solar investment tax credit"

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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12/05/15

  08:37:00 am, by Jim Jenal - Founder & CEO   , 445 words  
Categories: All About Solar Power, Solar Tax Incentives, Commercial Solar, Residential Solar, Ranting, Non-profit solar

3 Minutes to Save 30% - UPDATE!

UPDATE - 12/16 - Congress unveils a potential 5-Year Extension!

On Tuesday, Congressional leaders unveiled a behemoth spending bill (as in 2,009 pages!) that includes an extension for the solar tax credit.  As proposed, here are the details:

  • Continuation of the present 30% credit for three years, until 12/31/2019;
  • Step down to 26% for one year until 12/31/2020;
  • Step down to 22% for one year until 12/31/2021;
  • Step down to 10% for any project commenced before 1/1/2022 but not placed in service before 1/1/2024.
  • Change effective date to be the start of construction.

To be sure, this is not yet a done deal and Congress could balk on passing the bill, so watch this space!  Better yet, use the form below and tell your Representative to support the Consolidated Appropriations Act, 2016.


We have written about how the federal Investment Tax Credit - which provides solar system owners a credit on their taxes worth 30% of the system cost - is set to expire at the end of 2016 and the havoc that will cause in the industry.  We have been skeptical that the present Congress would act to extend the credit.  But activism is always better than skepticism, and right now there is a chance to act to save the ITC!

US Congress - they need to hear from you!It is a classic Congressional tradition - horse trading some call it, logrolling is another term of art - but at the end of the day it means compromise.  It turns out that there are tax credits that Republicans love (e.g., credits to businesses for various types of purchases) and tax credits that Democrats love (e.g., the earned income credit and others that generally help lower income constituents).  Turns out that there are enough of those credits on both sides (it is left as a challenge for the reader to determine which side of the aisle is supporting the solar ITC) to make it possible, maybe even likely, that a compromise bill could get through.

But there are many reasons why it might fail.  Deficit hawks in the House might try to derail it over its cost.  Democrats might complain it gives away too much to Big Business.  In short, it is the sort of compromise in which everyone can find something to love, as well as something to hate.  But can it pass?  That’s where you come in.

Below is a form where you can get the contact information for your member of Congress just by entering your zip code…

Take just three minutes to look up your Representative and give them a call.  When you get them on the line, tell them to support the longest possible extension of the solar ITC.  Three minutes to save 30% on future solar installations - that’s what we call time well spent!

02/05/15

  07:07:00 am, by Laurel Hamilton   , 364 words  
Categories: Solar Economics, Solar Tax Incentives, Ranting, Solar Policy

President Obama: Extend Solar Tax Credit... Congress: Don't make me laugh!

Two weeks ago I included the looming 2016 expiration of the federal Solar Investment Tax Credit (ITC) as one of the “Top 5 reasons you shouldn’t wait to go solar“. The 30% ITC rebate for residential and commercial solar projects is slated to drop to 10% for commercial projects (effectively stopping utility-scale solar growth) and to zero for residential projects (making going solar much less feasible for many homeowners). I mentioned that the likelihood of an extension is far from certain given our partisan federal ‘climate’.White House Flickr Photostream

Then…on Monday the White House released President Obama’s fiscal budget for 2016. To my delight the budget includes:

  1. Boosting clean energy funding to $7.4 billion;
  2. The Clean Power State Incentives Fund allocating $4 billion to encourage states to exceed the minimum requirements for cutting emissions; and
  3. The permanent extension of the solar Investment Tax Credit!

The $7.4 billion figure is up from the $6.9 billion proposed in Obama’s fiscal 2015 budget, a 7.2 percent rise, and over the $6.5 billion actually passed by Congress for this year. The extension of the ITC and further state incentives to reduce emissions would be immensely valuable to keep the ball rolling in the solar field. Given that solar is booming - providing over 170,000 living-wage jobs and eliminating over 13 million metric tons of harmful CO2 emissions in 2014 alone - it makes sense to continue to incentivize. 

However, it may come as no surprise to hear that some lawmakers have said they plan to block the President’s budget priorities entirely. An article in Politico titled “Republicans: Obama Budget ‘Laughable’” cites many congressional Republicans disdain for the budget.

“Obama’s budget is a retread of past proposals that died instantly on the Hill.”
Senate Finance Committee Chairman Orrin Hatch (R-Utah)

The website www.gop.gov cites the singular case of Solyndra as definitive evidence to oppose funding clean energy…despite also claiming to support job growth. (See here as to why Solyndra just doesn’t matter.) With Republicans now controlling both the Senate and the House of Representative, this party line opposition will be a serious challenge to overcome.

Even with the President himself in favor of extending the ITC, and improving funding to support clean energy, the fate of federal support for the solar industry is still quite uncertain.

Watch this space.

01/23/15

  02:40:00 pm, by Laurel Hamilton   , 600 words  
Categories: All About Solar Power

Top 5 Reasons You Shouldn't Wait to Go Solar

Who wouldn’t want to cut energy bills by 80% or more while effectively eliminating one’s negative energy impacts on air, water and finite natural resources? But with solar booming in recent years and technology updates reported almost daily, many home and business owners feel they should wait for the latest and greatest, or simply for the cost to continue to go down. However, there are a number of important reasons why you shouldn’t wait…

Sundail

1. Minor Technology Gains Aren’t Worth the Wait

Research in the solar industry is ongoing and I have no doubt that panel technology will improve. However, most changes in design and efficiency are small. And the research and development necessary to ensure the technology works in the field and not just the lab takes time. The bottom line is this: the financial value of small efficiency gains from panel improvements is outweighed by the cost of waiting. Any money you might save by installing more efficient panels is significantly less than the money you would save immediately by installing solar today.

2. Further Price Cuts Aren’t Worth the Wait

The cost of solar panels has fallen tremendously the last few years – now half of what they were in 2008, and 100 times lower than they were in 1978! So, should you wait for the price to drop lower? We’ve actually started to see the prices of PV solar modules begin to flatten and even slightly increase since 2013. Now that demand for solar is gaining momentum, the costs will likely continue to rise to meet that demand.

3. Electric Costs Keep Rising

The rate of increase varies depending on your state and electricity source but based on the last decade you can expect around 4-5% hikes in grid electricity each year (Energy Information Administration). That means that if you invest in a solar system that meets 100% of your electricity needs today, you will fully save on this year’s costs. But each year thereafter you’ll save an additional 4-5% for the life of your solar system (up to 40 years). As energy prices skyrocket you can rest easy.

4. Rebates and Tax Breaks Are Going, Going…

Disappearing rebates...Rebates for installing solar, once as high as $4.00/Watt, have largely gone away (Pasadena being a happy, and notable, exception).  Since 2006 many owners have benefited from the 30% federal tax credit to make a solar installation more economically attractive. However, on December 31, 2016, the 30% Solar Investment Tax Credit is scheduled to drop to 10% for commercial projects and to zero for residential projects. While we’re all crossing our fingers and toes hoping for an extension, with imminent grid parity – solar power reaching a cost comparative status with grid electricity – predicted to happen in 2016 in much of the US, and a federal government with little support for solar…it is entirely possible an extension is no more than a pipe dream.

5. The Environment Can’t Wait

If you’re concerned about climate change, you know that we need to act quickly, and in any way possible to prevent overshooting the global goal of a maximum 2 degree rise over pre-industrial temperatures. The typical residential solar system, about 5 kW, cuts about 6.7 tons of carbon emissions each year (using EPA’s CO2 emissions calculations). While there isn’t a dollar figure attached to that, you may want to consider the larger environmental value of going solar sooner rather than later.

So, yes, you can wait and hope for the technology to improve or costs to decline. But meanwhile you’re tied to your polluting, fossil-fuel-based power company with its steadily escalating electricity prices. Ugh. In contrast, your choice to go solar will quickly prove to be a great return on investment. Why not start saving now?

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.

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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