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Tuesday, 02-Dec-2008 06:32:48 PST


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Federal solar policy update

Go Solar for Less than Forty Cents on the Dollar

December 2006 - With the "Tax Relief and Health Care Act of 2006," Congress extended the federal investment tax credits for solar, wind, geothermal, and other projects for one more year. Solar designer and CCEnergy member Chris Nelder writes about why uninterrupted, long-term incentives are so critical to solar industry growth in his article for Renewable Energy Access »

Securing America's Energy Independence Act

The "Securing America's Energy Independence Act" calls for extending the solar tax credit for eight years and for changing the residential solar credit cap from $2,000 per system to $2,000 per kilowatt, tying the credit to system production rather than size.

The Energy Policy Act of 2005 provided a 30% tax credit for solar systems purchased for both residential and business applications. The residential credit was capped at $2,000 as a concession to the IRS. These credits will expire at the end of 2007 unless Congress passes legislation to extend them.

Just such a bill was introduced in both the House of Representatives and the Senate (H.R. 5206 and S. 2677, respectively). The main sponsors are Senators Gordon Smith (R-Oregon) and Robert Menendez (D-NJ), as well as Reps. J.D. Hayworth (R-AZ) and Michael McNulty (D-NY). Numerous other lawmakers agreed to co-sponsor the bill, bringing the total support up to nine Senators and 23 Representatives. The House and Senate bills include the following provisions:

  • Residential Solar Tax Credit: Extends a 30-percent tax credit, created in the Energy Policy Act of 2005, for the purchase of residential solar water heating, photovoltaic equipment, and fuel cell property. Changes the maximum credit to $2,000 for each kilowatt of capacity for solar equipment and $1,000 for each kilowatt of capacity for fuel cells. Credits may be taken against the alternative minimum tax. Expires after December 31, 2015.

  • Business Solar Tax Credit and Fuel Cell Tax Credit: Extends a 30-percent business credit, established in the Energy Policy Act of 2005, for the purchase of fuel cell power plants, solar energy property, and fiber-optic property used to illuminate the inside of a structure. Credits may be taken against the alternative minimum tax. Expires after December 31, 2015.

CCEnergy President Dan Pellegrini traveled to Washington DC earlier this year to lobby for support of this bill. He personally visited 10 California Congressional offices, including then-House Leader Nancy Pelosi's office (who is now Speaker of the House). He also spoke to staff analysts covering energy issues and explained the reasons why this bill is important and good for the economy. There appears to be a high level of support for this bill.

Tell your congressional representatives to co-sponsor these bills and push for their enactment into law. Take action right now »