Finally!

Not-quite-lost among the hubbub of the passage of the $700B bailout/rescue package last week was the inclusion in the bill of an 8-year extension of the federal tax credits for renewable energy projects.  If you haven’t been following this saga all year, you may not know that this was the 9th time (!) that these incentives had been included in a bill this year.  The current set of incentives was set to expire at the end of the year, and their extension was seen as vital to the continued health and growth of the renewable energy industry (especially solar) in this country.  As a political hot potato, the incentives were defeated on their own as part of the Renewable Energy and Job Creation Act of 2008 and the Energy Independence and Tax Relief Act of 2008 and also when included as part of other bills like the Economic Stimulus Act of 2008 (in a situation where John McCain could have helped get the bill to a vote on the Senate floor, but opted not to vote at all – the legislation was then passed with the energy tax breaks stripped out of it) and an Iraq War funding bill (when Republicans wanted to include the funding without a corresponding offset in revenue that Democrats demanded).  Indeed, you could be forgiven for throwing up your hands after the 9th or 10th e-mail pleading with you to write or call your congressional representatives about the crucial piece of legislation that would finally put this madness behind us, or even for thinking that the incentives were destined to die on the vine.

The financial rescue package, however, offered one last chance to get the extension passed before the end of the year.  Regardless of your sentiments on the “pork” attached to the final bill, the inclusion of these incentives is a lot more palatable than some of the other special favors that found their way in.   The total package includes somewhere in vicinity of $17-$18 billion in tax credits for power generated by solar, wind and other renewable sources through 2016.  It looks like the coal industry managed to get a piece of the action as well, but in the spirit of compromise, we’ll overlook that little tidbit for now.  What’s important is that the incentives make renewables more readily able to compete on cost with traditional (i.e. dirty) sources of energy.  One important change to note was the removal of the cap of $2,000 of incentives for residential projects.  This means that the cost of residential solar projects just got reduced even further.  When you combine these federal incentives with the already existing incentives at the state and local levels, the economics of solar really start to make sense for more and more customers.   ASES has a more complete rundown on the provisions – which also include elements covering energy efficient buildings and plug-in hybrids – on their website.

For more information on solar check out our PV resource page.  And the Power Naturally site can answer many of your questions about the process of buying and installing solar panels.


Posted on Monday, October 6th, 2008 at 4:14 pm | Tagged in Energy, Legislation, Photovoltaics, Politics | posted by Jamie

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