A week after the Solar Energy Industries Association (SEIA) sent out a mass letter signed by nearly 1,000 businesses to the U.S. Congress calling for an extension of the 30% Investment Tax Credit (ITC), four members of Congress have put forth legislation in the House and Senate that would extend the incentive for five years.
The House bill to extend the ITC has been introduced by three Representatives, including two Republican Congressmen, with a third Republican signing on as a co-sponsor. The Senate version was introduced by Senator Catherine Cortez Masto (D-Nevada), with the support of 14 other Democratic Senators, including some of the most outspoken proponents of renewable energy and action on climate: Senator Sheldon Whitehouse (D-Rhode Island), Tom Udall (D-New Mexico) and Chris Van Hollen (D-Maryland).
The legislation would enable an identical pattern of step-down to what is currently in place, only five years later. This means that in order to qualify for the full 30% ITC projects would need to begin construction by the end of 2024, with two more steps down in 2025 and 2026, before the credit would step down to 10% for businesses in 2027 and disappear entirely for residential installations.
If passed this could provide a long-term boost to an already booming solar market, and also extend the market for tax equity investments in solar.
“These bills are clear, easy wins members of Congress can deliver to their constituents that create jobs, bolster the economy and address climate change,” stated SEIA President and CEO Abigail Hopper. “Polling shows that Americans across the political spectrum are concerned about our changing climate and they strongly support solar.”
It remains to be seen if this will be incorporated as part of the tax extenders bills. As we’ve noted before, budget negotiations are complicated affairs, particularly in recent years. And one factor to consider is that the ITC extension achieved in late 2015 is widely attributed to a deal in which Republicans secured a lifting of the oil export ban.
One major concern is the lack of Republican co-sponsors who are yet listed on the Senate bill, particularly given Majority Leader Mitch McConnell’s (R-Kentucky) ruthless control of that chamber. However, SEIA appears prepared for a long fight. “In the next several months, we look forward to working with all members of Congress to move this legislation over the finish line,” noted SEIA’s Hopper.