As momentum in Congress builds for legislation that would jump-start solar energy development in the United States, the House introduced an energy tax package that would extend solar energy and fuel cell investment tax credits for homeowners and businesses through 2012. The solar tax credits are currently set to expire next year.
The Solar Energy Industries Association (SEIA) praised Reps. Devin Nunes (R-Calif.), John Shimkus (R-Ill.) and Dennis Cardoza (D-Calif.) for including the solar industry’s top legislative priority in the American-Made Energy Freedom Act.
The solar provisions are similar to those contained in S. 2677 and H.R. 5206, the “Securing America’s Energy Independence Act,” which was introduced earlier this summer and has gained a total of 74 House and 13 Senate co-sponsors to date.
“With record energy prices upon us, Congress is recognizing that the public needs sustainable energy solutions like solar power,” said Rhone Resch, SEIA president. “A longer-term investment tax credit would galvanize solar manufacturing in this country and provide more U.S. taxpayers with relief from high energy bills. That means cleaner air, more jobs and greater energy security for all.”
The Energy Policy Act of 2005 provided a 30 percent tax credit for solar systems purchased for residential and business applications. However, without legislative action, these credits will expire in two years. A long-term extension is essential to reducing the cost of solar energy, as it would create market conditions that allow solar companies to make investments.
“The United States has the best solar resources in the industrialized world, and we should be a world leader in capitalizing on those resources,” said Resch. “A long-term investment tax credit will stimulate economic investment in solar and create high-quality renewable industry jobs in every state.”
The House bill contains the following provisions:
- Residential solar tax credit: Extends a 30 percent tax credit, created by the Energy Policy Act of 2005, for the purchase of residential solar water heating, photovoltaic equipment and fuel cell property. Changes to maximum credit to $4,000 for each kilowatt of capacity for solar equipment and $1,000 for each kilowatt of capacity for fuel cells. It expires after Dec. 31, 2012.
- Business solar tax credit and fuel cell tax credit: Extends a 30 percent business credit, established in the Energy Policy Act of 2005, for the purchase of fuel cell power plants, solar energy property and fiber optic property used to illuminate the inside of a structure. Expires after Dec. 31, 2012, with the exception of the credit for fiber optic property, which expires after 2013.
For more information on solar energy tax credits, visit www.seia.org.