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.
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“These bills are clear, easy wins members of Congress can deliver to their constituents that create jobs, bolster the economy and address climate change…” Well, possibly. If you look to Australia and Europe, the cost for solar is much less than here in the USA. Cut the pork, and the prices will fall, and maybe more net business will result. The ITC is truly a double-edged sword; homeowners who do have a tax deduction can take advantage of the credit, but then many installers jack up the price-tag by 30% to ride that gravy train.
FYI, your link for the “legislation” (first paragraph) is bad. Appears to be looking at your personal files, not a on-line server.
Oops. Thanks for letting me know.
This should be fixed now.
TJ Comments about Pork:
Its not apples to apples:
Europe and Australia installation standards are less stringent. Labor costs are lower.
Europe and Australia have no permitting fees which towns charge. In some towns to the tune of 10% of install costs.
Europe and Australia do have to carry very expensive insurance.
Europe and Australia have no tariff charges against incoming equipment.
If you think installers jack up prices 30% in a very competitive industry you are very mistaken.
OK Craig, great reply, and very informative. I guess we can just label it all as the attached bureaucracy feeding off the business. Of course, the USA is not a socialist country, right! Just look at what it costs to live in SanFrancisco… I erred in just pinpointing installers. Than-you for correcting and enlightening me, and probably many others, too.
Interesting difference in the U.S. as in Australia and Europe. The thing I find interesting in the U.S. is the former push by entities like the old Solar City to basically ‘rent one’s roof’ for ‘their system’ for the PPA promise of a $100 a month electric bill for 30 years and “no maintenance or repair” for the life of the “agreement”. The word got out and folks began to realize, these leases can cloud the sale of their home with another entity renting roof space for their solar PV system. The rebates were early on signed over to the installing entity to bring the costs down. Now with the cost of solar PV dropping around 90% over the last 10 years, it is a smart play to buy the system outright, have it installed, use the ITC of 30%. You can find many local solar PV installers and electric contractors who can take care of the problems of a solar PV installation. It makes no sense to hook up with a ‘company’ that promises 30 years of free maintenance and repair that could go out of business next month. As the owner, you then can deal with the solar PV component manufacturers for warranty issues or have another contractor take care of the issues in your name.
When it says: “48(a)(6) of the Internal Revenue Code of 1986 is 2 amended— ”
Is that including the changes last year when the IRS allowed the ITC to include a behind the meter energy storage system? Of course this is early, but would be a shot in the arm of the residential solar PV installation, if energy storage can selectively or as a solar PV with energy storage system take advantage of the 30% ITC.
I’m no tax lawyer, but I don’t see why this wouldn’t include the changes to specifically allow solar-paired batteries.
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