Solar

Congress Extends Clean Energy Tax Credits

After several failed votes, Congress finally passed renewable energy tax credit legislation providing real support for solar and wind power, and in so doing, helped California reach its clean energy goals including building a million solar roofs by 2017.   

 

It is a little known fact that the $700 billion financial rescue package passed last fall contained the long-awaited extension of renewable energy tax incentives. It is also a little known fact that California’s Million Solar Roofs Initiative depends on this very policy measure.

 

“Regardless of what one thought about the Wall Street bailout, most want to see the government do more to promote clean renewable energy,” said Bernadette Del Chiaro, clean energy advocate.  

 

The federal tax credits apply to renewable technologies including wind and geothermal power, large-scale solar plants as well as rooftop solar photovoltaic and solar hot water systems. Businesses as well as individuals qualify. The tax credits are a critical driver in meeting the state’s renewable energy goals, including the Million Solar Roofs Initiative.

 

California’s Million Solar Roofs Initiative aims to build a million solar roofs on new and existing buildings by 2017. The initiative’s goals are based on consumer interest driven by two financial incentives –a state provided rebate and a federal tax credit.  In 2006, when California passed the Million Solar Roofs bill, it was assumed that congress would meet California half-way by extending the federal tax credits through 2016 as well.

 

When congress failed to do so, year after year, it threw California’s programs into question. On December 31, 2008, the tax credits were set to expire.

“There was a time when we seriously questioned whether California was going to be able to meet its clean energy goals in the absence of federal support,” said Del Chiaro.

 

Just in the nick of time, and thanks to the lobbying, media and public pressure levied by Environment California and our friends and allies across the country, Congress acted. On October 3, 2008, Congress passed renewable energy tax credits as part of the Emergency Economic Stabilization Act of 2008.

 

Specifically, the bill will:

  • Extend the 30% federal tax credit for solar photovoltaic and solar hot water roofs for homeowners and businesses through 2016;
  • Eliminate the $2,000 cap for residential solar systems;
  • Allow Alternative Minimum Tax (AMT) filers to receive the solar credit.
  • Extend the Production Tax Credit for large-scale renewable energy projects such as large wind and solar power plants.

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