When President Bush signed a bill on Oct. 1 that extended the 30-percent federal investment tax credit for both residential and commercial solar installations for eight years, solar industry leaders said it was the “most significant federal policy ever enacted for the solar industry.” The legislation, part of the $700 billion federal plan to shore up the U.S. credit system, also extended tax credits for wind and other renewable energy sources for one year.
“This bill is a major step in our long journey toward energy independence and ensures that solar energy will be a significant part of America's energy future,” said Rhone Resch, president of the Solar Energy Industries Association (SEIA). “This long-term extension of the solar tax credits will create a domestic solar industry with hundreds of thousands of jobs while providing clean, affordable, carbon-free energy to millions of American families, businesses and communities. By 2016, we expect solar energy to be the least expensive source of electricity for consumers.”
The solar investment tax credit (ITC) provisions will extend for eight years the 30-percent tax credit for both residential and commercial solar installations; eliminate the $2,000 monetary cap for residential solar electric installations, creating a true 30-percent tax credit (effective for property placed in service after Dec. 31, 2008); eliminate the prohibition on utilities from benefiting from the credit; authorize $800 million for clean energy bonds for renewable energy generating facilities, including solar; and provide other incentives to invest in renewable technologies.
“Over the last two years, these tax credits have turned the solar industry from a small, cottage industry into an economic engine for America,” said Resch. “Electricians, plumbers, roofers and construction workers can now get back to work. These jobs are the backbone of the American economy and the solar industry is creating them at a time when they are needed the most.”