Lawmakers on the Verge of Giving Renewables a Boost
This week, members of the House and Senate are expected to vote on a package that would extend the Solar Investment Tax Credit and the Federal Renewable Electricity Production Tax Credit.
The deal currently on the table would allow the Solar ITC and the PTC to be gradually phased out through 2022 and 2020, respectively.
In exchange for these extensions, House Republicans are demanding that the nearly 40-year ban on US crude oil exports be lifted, a compromise that is receiving mixed reviews. Some see at as a reasonable compromise, while others call it a dangerous environmental risk.
Regardless of one’s opinion on the wisdom of this tradeoff, there’s no doubt that an extension on the Solar ITC will mean a brighter future for solar energy, and shares in publicly traded renewable energy providers have already appreciated in anticipation of the deal’s passage.
Renewables Are Gaining Ground
The renewable energy industry has made great strides in the United States over the past decade, with solar energy leading the campaign for the hearts and minds of energy consumers.
True to Swanson’s Law (which states that the price of photovoltaics drops by 20% every time shipping volume doubles), the cost of going solar has continued to drop, even as technology improves.
Falling prices, coupled with the arrival of more affordable financing options for would-be solar adopters, have done much to fuel solar energy’s meteoric rise as the renewable energy source of choice among many businesses and private consumers.
The Solar ITC: a Catalyst for Solar Growth
While the popularity of solar energy has developed a momentum of its own, it’s impossible to deny the influence of the Solar Investment Tax Credit in helping it reach that point. Since the credit was implemented in 2006, annual solar installation has grown by more than 1,600%.
The Solar ITC, which has been repeatedly extended, offers solar adopters a 30% tax credit of applicable solar equipment and installation costs. It’s easy to see why the credit has been instrumental in spurring growth in the solar energy sector. The credit was slated to expire at the end of December 2016.
Good News for Wind Energy Producers
Congress may also give wind energy a shot in the arm, by renewing the Federal Renewable Electricity Production Tax Credit. The incentive, which was available to facilities that broke ground before the end of 2014, offered a credit of 2.3 cents per kilowatt-hour of electricity generated by wind, geothermal, and closed-loop biomass energy sources. Renewal of this credit would represent a substantial boon for wind energy farms.
Renewables Are Here to Stay
With renewables reaching cost parity with electricity sourced from fossil fuels in many markets, some in the renewable energy industry say these tax breaks are no longer a necessity for continued growth.
However, few would deny that their extension is big news for wind and solar developers, not to mention potential solar commercial and residential customers.
[Photo Via: Ktoo; Treehugger]
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