This week, the Senate Finance Committee approved a tax package that includes the strongest incentives for solar energy in over 20 years.
The bill expands the existing 10% commercial tax credit to 30% for all property placed in service after December 31, 2005 and before January 1, 2010. The tax credit returns to 10% in 2010. This tax credit is available for all solar technologies, including PV, concentrating solar power, solar water heating, and solar hybrid lighting.
The bill also creates the first residential tax credits for solar energy in the last 23 years! Residential consumers will enjoy a 30% tax credit for the installation of PV and solar water heating systems, capped at $2000. These provisions were passed with strong, bipartisan support.
Having passed the Senate Finance Committee, the tax package will now be considered by the full Senate as an amendment to the energy bill. The Senate will continue markup of the Energy Bill next week and have scheduled a final vote on the bill for June 24th. In early July, the House and the Senate will work through Conference Committee to resolve differences between their respective energy bills.
The Joint Committee on Taxation estimated that the solar incentives would cost the Treasury $121 million (in an $18 billion tax package); this low score will help to keep the solar provisions in the final energy bill.
The inclusion of the 30% ITC in the Senate energy bill is a significant milestone for the industry and required a concerted effort by many people. Many thanks go out to Chris O’Brien, Shirley Neff; Matt Salmon; Katie Cullen; Charlie Shipp; Dick Powers and the Venable Team; Jim Callihan and Renewable Energy Access; and the full SEIA Government Affairs Committee.
Special thanks also go to all of the companies that faxed over 260 letters to Senators in support of the solar tax credits. This combined effort by dozens of people made these tax incentives possible. The solar industry has proven itself capable of achieving great results, and will continue to work hard for the next 6 weeks to ensure the solar provisions remain part of the energy bill.
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