Boom Puts Spotlight on Renewing Solar Tax Break

WASHINGTON (CQ-Roll Call/TNS) -

Solar energy is booming in the United States, and the industry wants everyone to know it. But winning an extension of a key solar tax break in a Republican Congress suspicious of green energy won’t be easy, especially as regulatory and market forces continue to batter fossil fuels and nuclear power.

The industry’s lobbying arm, the Solar Energy Industries Association, is working overtime to keep the incentive — the investment tax credit, or ITC — on the books past 2016, when its current treatment ends.

“This industry is clicking, and all we need right now are stable consistent policies to remain in effect for the foreseeable future,” says SEIA spokesman Ken Johnson.

Renewables continue to pick up market share, with solar leading the way.

Falling equipment prices and the continued popularity of rooftop solar are predicted to push a record-high 9 gigawatts of new solar capacity online in 2015, according to a recent analysis by Bloomberg New Energy Finance. That’s enough to power more than 6 million homes.

The rapid growth has also been a boon for overall U.S. job numbers, as President Barack Obama noted this month.

“The solar industry is actually adding jobs 10 times faster than the rest of the economy,” Obama said.

But the good times stem in no small part from the ITC, which has been solar’s primary federal incentive for a decade. First enacted in 2005, the credit allows businesses and home owners to write off 30 percent of the costs of installing solar.

Unless Congress acts, at the end of 2016 the credit drops to 10 percent for commercial projects and will disappear entirely for residential properties.

The SEIA’s top priority is winning an extension, although Johnson says the group hasn’t made any decisions on what it wants that extension to look like or how long it would last.

Republican support for tax breaks for renewable energy continues to slip, driven by a backlash over the Obama administration’s climate agenda.

Further complicating matters is a coordinated campaign by conservative groups to pressure lawmakers to oppose more clean-energy tax breaks.

Led by the American Energy Alliance, which has financial ties to the Koch brothers, the coalition helped thwart the wind industry’s effort to secure a long-term extension of its main tax break, the now-expired production tax credit.

The AEA has been less active on the solar credit, but wants to see it off the books, as well.

“It’s on our radar,” said spokesman Chris Warren.

The SEIA is working to preempt the counterattack. Over the past week, it has been issuing daily releases highlighting solar’s growing economic presence in states such as Missouri, Indiana and Connecticut.

The arguments for both credits are largely the same, including the need for policy certainty for investors, as well as the permanent tax breaks that the oil and gas industries have received for nearly a century.