By now you should know that on Friday the extension of the renewable energy ITCs (investment tax credits) were signed by the executive office of the United States after the Senate and the House approved the bailout bills.
Over the course of eight weeks the entire renewable energy industry in the United States had just about come to a standstill for reasons that did not involve the financial crisis that brought Lehman Brothers to its knees (see Tax Credits are in serious jeopardy… so is scaling the renewable energy industry).
What changed since the last time it went to vote in late July? Well, it is directly tied to the state of the current US economy and the $700 Billion congressional bailout. The extension of the ITCs were wrapped up in the bill – here are the pertinent points that relate to the Renewable Energy Industry.
- Extension for eight years of the 30% tax credit for both residential and commercial solar installations.
- Elimination of the $2000 monetary cap for residential solar electric installations, creating a true 30% tax credit
- Elimination of the prohibition on utilities from benefiting from the credit.
- Allowance for alternative minimum tax (AMT) filers, both businesses and individuals, to take the credit.
- Authorization of $800 million for clean energy bonds for renewable energy generating facilities, including solar.
The gist of it is that renewable energy investors can now make projections for the investments that they are considering. The big kicker is that third bullet point – because now, large utilities like PG&E, SDG&E and others can take advantage of the tax incentives and we can truly begin to scale these technologies by producing massive solar and wind farms to produce carbon free, locally generated power.
The ramifications of this sort of a measure are tremendous; it presents a virtuous circle to an economy that is gripped with apprehension. Here is why:
1. It provides for stable project investments.
2. It provides good paying local jobs.
3. It stimulates the investment into new technologies that create more jobs and address making our systems more and more efficient.
and most importantly:
4. It allows for the roll out of more capacity which brings down costs as the industry benefits from the economies of scale.
At a time when the US and the World’s economy is looking particularly bleak, take solace in knowing that you are working in a sector that aligns your personal convictions with the prospects of financial return.
We would love some user participation on this, please let us know how Friday’s bill has affected your work.