Federal support of solar power has been an unpredictable ally over the years, as politics have more than once cast a long shadow over the renewal of tax credits.
This year, members of Congress have taken steps to remove that uncertainty by extending the credit for another five years before it sunsets.
In July, U.S. Senator Catherine Cortez Masto (D-Nev.) introduced legislation to bolster clean energy in a number of ways. Among other things, the Renewable Energy Extension Act would extend the solar investment tax credit (ITC) and other clean energy tax incentives that are set to begin expiring at the end of this year.
The tax credits received an extension in 2015 and were expected to be incrementally phased out at the end of this year. The Act would provide a five-year extension of both the ITC and the residential renewable energy tax credit for solar power.
In addition to solar, the bill extends the ITC for other clean energy technologies, such as fiber-optic solar, fuel cells, small wind, microturbines, combined heat and power and geothermal heat pumps.
The ITC is a 30% tax credit for solar power systems on residential and commercial properties. The commercial credit can be applied to both customer-sited commercial solar systems and large-scale utility solar farms.
According to the Solar Energy Industry Association, since the ITC's implementation in 2006, it has helped the U.S. solar industry grow by more than 10,000%.
Momentum for an extension of the ITC began earlier this summer. According to Utility Dive, in June, Senator Cortez Masto and 19 other Senators sent a letter to the Senate Finance Committee Chair and Ranking Member, urging the Committee to prioritize and preserve the ITC and other clean energy credits. In July, nearly 1,000 solar companies called on Congress to extend the solar ITC.
Senator Cortez Masto’s legislation is co-sponsored by fifteen of her colleagues. U.S. Representative Mike Thompson (D-Calif.) introduced a bipartisan companion bill in the House of Representatives.