Solar and Wind Tax Credit Extended
Congress has extended a federal tax credit for solar installations that was set to expire at the end of 2016. Industry operatives in the region say it will provide stability in a growth sector that could have stalled.
The 30 percent income tax credit for solar investments has been extended by Congress for another five years. The measure was part of the budget deal passed last week. The tax credit has two parts: the solar tax credit has been extended through 2021. It will be phased down over the five years to 10 percent. A production tax credit for wind will be extended through 2019 with a phase-out timeline.
Vermont Public Interest Group Clean Energy Advocate Ben Walsh says the ramp-down in the plan makes sense. “What this means for Vermont is that state planners, that regional planners that the renewable energy industry and the solar industry will be able to plan and predict the amount of renewable energy that’s going to be coming on line much more reliably. And that’s good even over and above simply the fact that so much renewable energy is going to be built because of this.”
Vermont’s largest utility – Green Mountain Power – has been investing heavily in renewable energy including solar and wind. Communications Executive Kristin Carlson says they are focused on power that is generated and used closer to the community. “Our customers are telling us that they want to be able to access the latest technologies. They want to be able to go solar. And so to the extent that the customers want to do this, this will provide a benefit for them.”
Waterbury-based SunCommon Founder and Co-President Duane Peterson said clean energy advocates had been led to believe that federal support for renewables would end next year and his company was preparing for the tax credit cliff when Congress suddenly instead extended it. “Whomever owns a solar system may apply to the federal government for an income tax credit equal to 30 percent of the entire project cost. So that is a deduction from the taxes that you owe on your next return.”
All Earth Renewables Chief Strategy Officer Andrew Savage says businesses can plan for growth and invest in the solar sector now that the tax credit has new life. “It allows for a certain amount of business predictability where we can grow, we can invest, we can hire and what really matters here is that the extension of the investment tax credit has allowed, or opened the door, for homeowners and businesses and other institutions to go solar and do so with the support of a federal tax credit instead of having this crunch in 2016.”
A Bloomberg New Energy Finance report on the tax credit determined that 59 gigawatts of solar would be installed nationally from 2016 to 2021 if the credit was renewed vs. 41 gigawatts if it was not.