Sunday, October 5, 2008

Notorious Bill Extends Solar Tax Credit

Just when it looked like the sun would set on the federal solar investment tax credit, it will live on to see another day--make that eight more years. The tax credit for wind was extended a year.

The House of Representatives passed the Emergency Economic Stabilization Act of 2008, Friday, October 3, by a vote of 263 to 171. Less than two hours later, President George W. Bush signed it into law. The Senate had already passed it on Wednesday. Of course, the full intent of the legislation was welfare for Wall Street but banks will afford to make business loans to rev up American capitalism on Main Street. Extending the solar/wind tax credits also makes the bill more palatable.

"I am pleased that the bill includes an extension of tax cuts for clean renewable energy that will create and save half a million good-paying paying jobs in America immediately," said House Speaker Nancy Pelosi of California.

The one-year production tax credit extension also applies to other energy sources such as geothermal; closed-loop biomass; hydropower; landfill gas; and trash combustion facilities. It also creates a tax credit for a new energy production category - marine renewable - which is energy derived from waves, tides, and currents.

Furthermore, the measure boosts the tax credit limitation for fuel cells from $500 to $1,500 per half kilowatt of capacity.

Renewable energy purists must shudder at another part of the bill. It also provides tax credits for advanced coal electricity projects with highest priority given to projects with the greatest separation and sequestration percentage of total carbon dioxide emissions at a cost of $1.4 billion over 10 years. This writer believes the technology and time it takes to sequester CO2 at a coal-fired power plant would more efficiently be spent on truly renewable forms of energy generation, like solar, wind, geothermal, biomass conversion and marine methods. Like Halloween, Congress and the White House feel they must spread the goodies around.

"This bill is a major step in our long journey toward energy independence and ensures that solar energy will be a significant part of America's energy future," said Rhone Resch, president of the Solar Energy Industries Association, which lobbied long and hard for the tax credit extensions during the previous 18 months.

Resch said 60,000 Americans currently are employed by the solar energy industry.

"This long-term extension of the solar tax credits will create a domestic solar industry with hundreds of thousands of jobs while providing clean, affordable, carbon-free energy to millions of American families, businesses, and communities," said Resch.

The bill extends the solar investment tax credit for eight years the 30 percent tax credit for both residential and commercial solar installations. The $2,000 cap for residential solar electric installations is eliminated and so is the prohibition on utilities from benefiting from the credit. When the tax credits first were enacted by the Energy Policy Act of 2005, the solar industry experienced unprecedently growth. In fact, the amount of solar electric capacity installed in the United States during 2007 was double that installed in 2006.

"This bill puts the sun to work for every American," added Resch. "And by 2016, we expect solar energy to be the least expensive source of electricity for consumers."


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