On October 3, 2008, the House of Representatives passed the Emergency Economic Stabilization Act (EESA) of 2008, which includes an 8-year extension of the solar investment tax credit (ITC) and provides other critical incentives to the renewable energy marketplace.
Effective January 1, 2009, the EESA was signed into law by President Bush 3 hours after House passage, finally breathing life into what was thought to have been a lost cause as the ITC was about to expire. But not only does this new law extend the ITC, it also provides additional provisions that will combine for $18 billion in renewable energy tax credits. Those provisions include credits for solar, wind, and several other clean-energy industries in the United States.
The EESA removes the $2000 limit on the tax credit for residential systems. Now, both commercial and residential photovoltaic systems will be eligible for a 30% tax credit. The new law also contains a suspension of utility exemptions so that electric utility companys can also benifit from the ITC.
“It has been a long time coming, but we have finally achieved victory on the ITC,” said Rhone Resch, president of the Solar Energy Industries Association. “It took seven votes in the House and 10 votes in the Senate, but in the end, Congress came through.”
According to SunWize, maufacturer of solar panels and solar power system components, EEAS represents the potential for “rapid growth in the industry as well as a significant increase in the affordability and financial return of solar electricity for homeowners. The same force that fueled the dramatic growth of the commercial solar market will now be directed towards residential customers. Needless to say, there is going to be a boom in residential solar in 2009 and beyond.”
“By passing this bill,” according to Suntech America president Roger Efird, “Congress has finally given the solar energy industry the ‘policy certainty’ that will attract investment, expand manufacturing and lower the cost of solar energy to consumers,” Efird said in a statement. “This will allow companies like mine to move forward with expansion plans to serve the growing US market.”
The solar industry is the greatest beneficiary of this legislation. The tax credits for solar initiatives are good for the next 8 years. Additionally, the $2,000 tax credit limit for residential solar systems being lifted means that homeowners can get a 30% tax credit on the solar panels they install starting next year. And now utilities can also take advantage of the tax-advantages. This new legislation will allow the solar marketplace in the U.S. to continue its strong growth and attract high levels of investment.
