Near Signing, Stimulus Burns Bright for Solar

(Much of the information in this post is reported in "US House & Senate agree to US$787B package; good news for solar industry" by Patricia Johnson in PV-tech.org. Feb. 16, 2009)

When President Obama signs the so-called American Recovery and Reinvestment Act tomorrow in Denver, he will be signing into law the single most expansive economic rescue package since the Great Depression, even after cuts to the legislation. The final $787 billion bill, being signed within the his first 30 days in office, likely could be the biggest piece of legislation President Obama will ever sign. Indeed, it would be a heady moment for any president.

Better yet, the final act gives many reasons for the solar power industry to be pleased.

The bill includes about $6 billion in loan guarantees for renewable energy project, mostly solar. PV industry estimates some 67,000 jobs will be created in 2009 and 119,000 more over the next two years.

Many solar/wind advocates, including this writer, have groused for years about the federal government's favoring coal, natural gas and nuclear power electricity producers. Coal has been favored because it simply produces power the cheapest; natural gas because it's relatively plentiful and burns cleaner; and nuclear power because it's supposedly cheap and non polluting. In reality, coal-fired power plants are the single-most polluting source of greenhouse gas emissions; natural gas, although cleaner burning, is still the bastard gas of fossil fuels and emits GHGs when burned; and nuclear power has never been "too cheap to meter" as it was once touted and nuclear waste is still a chronic problem. But PV panel manufacturers have been forced to make it on their own in the uneven power market.

Until now.

The stimulus package creates a new 30% tax credit for facilities and equipment used to manufacture renewable energy-generating components, such as solar panels. Finally, the actual makers--not just the end-users--get an break.

It gets better. Taxpayers purchasing PV systems can redeem the 30% tax credit as a cash grant if they do not have a sufficient tax liability to offset. Furthermore, the tax penalty for subsidized energy financing will be repealed.

Finally, the stimulus commits $11 billion to new technologies contributing to a more efficient energy grid, the "smart grid"; $6.3 billion for energy efficiency and conservation grants; and $2.5 billion to fund energy efficiency and renewable energy research.