Posted 01.12.16 in News by Steve
The new U.S. budget agreement, approved in December 2015, renews incentives for solar and wind power that were scheduled to expire at the end of 2015.
The bill, which includes a solar investment tax credit (ITC) extension, allows purchasers of solar power systems to continue to obtain 30% of the price of a solar array as a federal tax credit. The ITC applies to both residential and commercial installations and will be good through 2019. After that, the credit will taper off, declining to 10% in 2022 where it will remain.
The credits go to consumers who buy solar arrays. If the solar equipment is leased from installers like Solar World, SolarCity or Sunrun, the tax credits go to the institution offering the financing, which is often a bank or large investment firm.
Rhone Resch, president and CEO of the Solar Energy Industries Association (SEIA) praised the legislation. In a statement on the SEIA website he said the “five-year extension of the ITC will lead to more than $133 billion in new, private sector investment in the U.S. economy by 2020. And much of this growth will come from small businesses, which make up more than 85 percent of America’s 8,000 solar companies. Solar power in this nation will more than triple by 2020, hitting 100 gigawatts. That’s enough to power 20 million homes and represents 3.5 percent of U.S. electricity generation. The solar industry now has a seat at the table with the nation’s other major electricity producers. Solar is the planet’s most abundant source of energy and offers all Americans clean electricity that can be built at scale and will make our nation proud and prosperous as a world leader in a new energy paradigm.”
The Joint Committee on Taxation, which has members of both parties from both the House and the Senate, estimated that continued solar tax credits will cost taxpayers $9.3 billion, while extending tax credits for wind power will cost $14.5 billion.