Posts Tagged ‘tax credit’

Renewable Tax Credits Extended, Finally

Friday, October 3rd, 2008

As the financial bailout measure was passed by Congress today, several tax credits were added to the bill, including an extension of renewable energy tax credits.  These tax credits have been bouncing back and forth in Congress all year.  However one feels about the rest of the bailout bill, these tax credits are good news for renewable energy; there must be a great number of relieved renewable energy workers celebrating tonight.  The measure includes an 8 year extension of the investment tax credit for solar electric systems, extending the 30% tax credit and removing the $2000 cap on the credit for residential systems that has limited the impact in this market.  The measure also includes credits for small wind, fuel cells and geothermal systems. 

The on-again off-again nature of these credits in the past with short term extensions that were allowed to expire has limited their impact.  Now with an 8 year extension in place the industry can plan and invest for long term growth with this piece of their financial picture more secure, encouraging their growth around the country. 

At West Coast Green  (September 25-27) I talked about the tax credits with Gary Gerber, the CEO of Sun Light and Power, a San Francisco Bay Area solar installer.  With this type of longer term policy supporting solar power nationwide, Gerber felt we would see solar grow beyond states like California with strong support for solar such as the Million Solar Roofs Initiative, creating renewable energy businesses and jobs across the country.

Its hard to say that anybody is completely unaffected by the broader economic situation, but Gerber said that he has “not heard or seen anything that says we are negatively affected.” 

“We are in the business of saving people money,” he went on to say, a good business to be in when the economy is down. 

Several other measures in the bill also support renewable energy, including a one year extension of production tax credits for solar and wind, incentives for biofuels, and the creation of energy conservation bonds to fight climate change and encourage energy efficiency measures.  The Cleantech Practice Group of Morrison & Foerster compiled a nice summary of these measures.  In the days that follow after people get a chance to read the bill through more closely we’ll hear more about its impact.

One of the lessons of our current financial situation is that free markets cannot be left unregulated and expected to move in a direction that is beneficial to the long term interests of society and the economy.  The same is true of the environment.  Government plays an important role in regulating industry, driving changes that are beneficial to us all.  These measures to support renewable energy are an important example of this, creating a multitude of jobs and businesses, helping the economy, and helping the planet.