Solar Advocates See a Ray of Sun in Energy Bill
After five years Congress finally passed an Energy Bill and the President has signed it into law. While giving away $14 billion in subsidies for the oil, coal, and nuclear industries that are enjoying record profits, the massive energy bill offers few tangible benefits for the average U.S. citizen.
However, the solar tax credit is one provision in the bill that many Americans can use to decrease their utility bills, increase their energy reliability and independence and reduce emissions that lead to global warming. There has never been a better time to install a solar hot water heater or a photovoltaic (PV) system. Photovoltaics (PV) is the process by which sunlight is converted directly to electricity.
A federal investment tax credit is included in the bill to promote all forms of solar energy. Solar thermal systems that provide for a home's hot water, photovoltaic systems that provide electric power, solar-hybrid lighting technologies, and even for the development of commercial industrial-scale Concentrating Solar Power plants like those built in the California Desert in the late '70s and early '80s.
Specifically, the bill increases the existing 10 percent investment tax credit for commercial solar installations to 30 percent for two years with no maximum on the amount of the credit. This credit applies to any system placed in service after December 31, 2005 and before January 1, 2008. After two years the credit reverts to a permanent 10 percent thereafter.
What could have the most impact for typical Americans, is a new 30 percent tax credit, up to a maximum of $2,000, for residential solar installations for the next two years. It is also good on any system placed in service after December 31, 2005 and before January 1, 2008. Likewise, most solar technologies will be eligible but solar thermal and solar PV are expected to make the most gains. Solar pool heating is not eligible for the tax credit.
The new tax credit, in combination with the PV grant available through the Sustainable Development Fund to any customer in the Philadelphia region, can cover more than 60% of the cost of a solar PV system. For more information on the PV grants call 215-635-0900 or go to www.trfund.com/sdf/. Additional information on all types of solar energy can be found at www.phillysolar.org, the website of the Philadelphia Million Solar Roofs Partnership or by calling (215) 320-4612.
A number of other provisions included in the final energy bill will also benefit solar energy projects. These include federal loan guarantees for large-scale "innovative technologies," government solar purchase authorizations, and energy service performance contracts.
The solar tax credit may seem to be a small concession when compared to the majority of the bill's focus on the traditional fossil and nuclear industries but it does represent a major victory for solar service providers and just maybe a hint of shifting attitudes towards solar. Such wide-ranging solar provisions were not included in any of the previous congressional efforts to enact an energy bill. Fuel cells are the only other non-traditional energy technology to gain a 30 percent investment tax credit.
Congressman Charles Bass from New Hampshire said the 30 percent solar credit for consumers was great news for this nation's future energy independence. He said the solar provisions might someday be viewed as the most significant renewable energy policy shift in decades. Incentives for consumers to drive the industry and push the nation toward self-reliance will produce far greater results than the bill’s billions in incentives aimed at fossil fuel producers and utilities.
Other items included in the energy bill that will be of interest to consumers across the country are tax credits for investments in commercial and residential energy efficiency and an extension of a $2,000 hybrid vehicle tax break.
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