Still Uncertainty about U.S. Federal Tax Credits

“Sunny Day For Solar” titled the U.S. American Solar Energy Industries Association (SEIA) on the 24th of September. A day beforehand, the Senate had approved its version of the Energy Improvement and Extension Act of 2008 which would extend the 30 % tax credits for solar thermal systems through 2016. This US$17 billion energy-tax package thus provides residents and businesses that install or build a solar thermal system, a photovoltaics installation or a wind turbine a continued 30 % rebate on the cost in the form of a tax credit, an incentive which is due to expire at the end of the year. In the Senat´s draft, the cap of US$ 2,000 for commercial solar thermal installations has additionally been removed.

Unfortunately, this does not mean certainty yet about the outcome regarding the extension of the tax credits, because the House of Representatives also has to approve the draft. Insiders assume that the draft of the act will likely not pass there, because the House of Representatives has already approved a modified draft of the act. One sticking point is that the two institutions cannot agree on the scope and funding of these regulations.

“The House's version of the solar legislation is identical to the Senate's, but other provisions of the House bill, including the elimination of tax credits for fossil fuels, are under debate and could stall the legislation”, says a press release of SEIA on the 24th of September. "We're probably 50-50 at this point," comments Rhone Resch, president of SEIA, on the level of uncertainty.

Still, the pressure from the renewable energy sector in the States is very high. The management consultancy Navigant Consulting Inc found that more than 116,000 jobs, including 39,400 jobs in the solar industry, could be lost in 2009 if the renewable energy tax credits are not extended. In this case investments of nearly US$ 19 billion would also be lost.

Further information: www.seia.org

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