Bill would extend solar tax credits for 8 years and eliminate cap on residential installations
SEIA expects the Senate to debate and pass legislation that extends the federal solar investment tax credits (ITC) for 8 years. Indications are that H.R. 6049, the Baucus-Grassley Energy Improvement and Extension Act of 2008, will pass with bipartisan support today.
The Senate will vote on the bill in a series of amendments to H.R. 6049. The first on renewable energy tax credits, including the solar ITC, is expected to pass overwhelmingly as early as noon today. Three other votes will include an alternative minimum tax patch that is paid for (expected to fail), an AMT patch that is not paid for and a business tax extenders that includes extension of the expired R&D tax credit. The rest of the votes for the full bill package should be completed by late today.
SEIA has pursued this legislation to create a stable investment environment and stimulate demand in the U.S. for installation of solar energy technology. Under the proposed Senate bill, the 30 percent solar tax credit will be extended for 8 years, for both commercial and residential consumers. Also, the bill allows those taxpayers that trigger AMT (alternative minimum tax) to take the solar tax credit. The 30-percent solar investment tax credits first became effective in January, 2006, a result of the 2005 Energy Bill.
Navigant Consulting, Inc., assessed the economic impact of extending solar tax credits for 8 years in a report released on Sept. 15. The independent analysis concluded that this tax policy would create 1.2 million job opportunities (job-years), including 440,000 permanent jobs and spur $232 billion in investment in the solar energy sector alone. NCI estimated that 28 gigawatts of solar energy systems would be installed by 2016. The analysis assumed residential system tax credits would be capped at $2,000. Industry observers agree the impact would be far greater if the residential cap was increased or eliminated.
SEIA staff has heard that the House is working on proposed bills for the AMT patch that includes disaster relief and another version of the tax extenders with renewable energy tax credits. The House could vote on these as early as tomorrow. The two chambers would then have to resolve differences before they recess. According to a Statement of Administration Policy issued this morning, the President would sign the bill.
After nearly two years of hard work from SEIA staff, member companies, and our coalition partners to achieve a long-term extension of the ITC, we appear to be close to victory.
For more updates on the developments in Congress regarding the ITC, go to http://www.seia.org/cs/federal_issues/the_investment_tax_credit_itc. Watch the debate in the Senate on this legislation today on C-SPAN 2.