Solar Projects Hinge on Investment Tax Credit
Aug 18, 2008
Northern California utility Pacific Gas & Electric Company (PG&E) announced two historic solar power agreements last week that, combined, would provide the company with 800 megawatts of renewable energy. To put that in perspective, PG&E described it as enough energy to "serve approximately 239,000 residential homes each year."
It's a coup for PG&E and the two companies that won their business, OptiSolar and SunPower. However, the company acknowledges in its press release that both deals are contingent on Congress extending the investment tax credit (ITC) that is set to expire on December 31st. And it looks like those projects aren't the only ones that may be impacted if the ITC isn't extended.
According to venture capitalist Josh Green of Mohr Davidow Ventures, who's quoted in News.com today, "many of these commercial projects are in important planning stages right now, and the overall industry is at the tipping point that will lead to widespread adoption...the absence of the ITC will kill most, if not all, of this growing momentum."
The ITC currently offers a 30 percent tax break on commercial and residential solar installations, with no cap on commercial deals like PG&E's and a $2,000 limit on residential projects. The Solar Energy Industries Association has been lobbying for an eight-year extension of the ITC in order to "provide the market 'demand-signal' that is needed for industry to build new manufacturing capacity, expand the installer work force and construct new utility-scale solar power plants."
In May, the House passed a bill that would provide for such an 8-year extension, but similar legislation has failed to make its way out of the Senate and there are concerns among those in the solar industry that election-year politics will hamper the bill's progress. Read more at News.com.
Tags:
cleantech, Congress, green tech, ITC, renewable energy, Solar Energy Industries Association, solar power, tax credit
