Time is now to extend renewable energy tax credits, says SPIE
A standoff between Democrats and Republicans in Congress has prevented the renewal of tax credits for alternative energy that experts say are critical to the wide adoption of solar and wind energy in the United States.
A standoff between Democrats and Republicans in Congress has prevented the renewal of tax credits for alternative energy that experts say are critical to the wide adoption of solar and wind energy in the United States. As the December 31 expiration of the credits looms closer, it is important that Congress act quickly to end industry uncertainty, according to SPIE and its members.
Renewable energy industries, including solar photovoltaic companies, totaled nearly $40 billion in gross revenues in 2006 and were responsible for more than 450,000 direct and indirect jobs, according to the American Society for Solar Energy.
"Without assurance of the tax credits, progress toward energy independence and cost efficiency enabled by recent advances could be drastically delayed," said SPIE CEO Eugene Arthurs. "The U.S. will not be in a position to benefit from recent technology breakthroughs and ongoing research."
At stake are incentives that reduce the cost of developing solar, wind, biomass, and other renewable energy sources eligible under the Investment Tax Credit (ITC).
Continuation of the tax credits now is crucial for leveraging recent advancements in solar energy and keeping momentum going in development of technology.
"Photovoltaic electricity is on the cusp of reaching grid parity, becoming competitive with petroleum, natural gas, and coal-fired utilities," said Ravi Durvasula, Director of Optical Engineering at Lightfleet Corporation. "Extending renewable energy tax incentives at this critical juncture will undoubtedly hasten the technical progress and thus shorten the timelines needed for reaching the tipping point." Durvasula was Symposium Chair of SPIE's Solar Energy conferences at its 2008 Optics and Photonics event.
"Solar photovoltaic and other renewable energy technologies have advanced rapidly in the U.S. over the past few years," said Robert J. Phillippy, President and CEO of Newport Corporation, a Corporate Member of SPIE. "Extension of the renewable energy tax credits will enable development of more cost-effective and efficient sources of renewable energy to continue at this rapid pace. This will provide significant and sustainable benefits to our environment and our economy."
The White House has endorsed more than one bill to extend the credits, but its efforts have relied on a balanced-budget approach that required that they be offset by cuts in other areas. With President Bush threatening to veto such legislation, and Senate leadership not being able to muster a veto-proof 60 votes, the effort remains stalled, despite bipartisan agreement on the need for the tax incentives.
With many projects now stymied until the stalemate is resolved, the industry is beginning to feel the fallout from the potential expiration of the credits at the end of 2008. Solar manufacturers and installers have delayed hiring, companies have revised earnings forecasts, and homeowners may delay adding alternative energy systems due to the potential increase in out-of-pocket expense. Other companies are adjusting their strategies to invest outside the U.S.
The proposed legislation would extend and increase the residential energy-efficient property tax credit, which currently gives homeowners up to $2,000 for installing solar panels, geothermal heat pumps or small wind equipment. The credit would be doubled and extended for 10 years.
A 30 percent subsidy for businesses investing in solar power and a renewable-energy production tax credit of 1.9 cents per kilowatt hour for utilities are also part of the package.