Published: Mon, December 21, 2015
Business | By Max Garcia

Solar Investment Tax Credit Gets Extension for Years

Solar Investment Tax Credit Gets Extension for Years

SunEdison's president and CEO Ahmad R. Chatila said the extension was the "foundation of a predictable renewable energy policy which will create jobs, provide Americans with cost-effective electricity, and keep us on a path to clean and sustainable energy".

The $650bn tax bill renews around 50 business and individual tax breaks that have expired or are about to lapse, including a five-year extension for production and investment tax credits.

In addition to the spending and tax provisions, Congress also formally lifted a ban on US crude oil exports, something Republicans and oil-state Democrats had sought. Developed countries have agreed to raise $100 billion per year in climate financing beginning from 2020 to help emerging countries transition their economies to meet the targets. Some utilities in the state have been shutting down their offers for net-metering, in which solar investors get to sell them power. "We expect a lot of incremental wind build in Texas and a lot of growth in solar in the Southeast and the Midwest". The cost of solar energy has significantly closed the gap with coal and natural gas worldwide, and it's likely that the deal will only accelerate this trend, building greater scale for the solar industry via the improved availability of financing, while potentially penalizing the use of fossil fuels. Solar employment is also poised to almost double over the same period, to roughly 420,000 jobs.

Tom Werner, CEO of manufacturer and system developer, SunPower, said the extension would have positive consequences beyond the solar industry.

AWEA credits the PTC for spurring a more than 300 percent increase in USA wind power since 2008 - from 16.7 GW to 69.5 GW by the third quarter of 2015.

On Friday, The Congress passed a legislation that allowed solar investment tax credit (ITC) to be extended for as long as eight years.

The last pages of the omnibus spending bill, released Tuesday night, present a plan to gradually reduce the 30% solar ITC for commercial projects over the coming years, instead of cutting to 10% at the end of 2016. "The ITC extension makes America and its solar industry the world's preeminent producer of clean and affordable energy".

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