House Releases Tax Package That Will Extend Solar ITC by Five Years

Solar Power WorldNovember 20, 2019196

Summary:

The House Ways and Means Committee released a clean energy tax credit that will grant a five-year extension to the solar investment tax credit as well as grant a new solar incentive for solar energy storage.

Main Article: 

House Releases Tax Package That Will Extend Solar ITC by Five Years

The House Ways and Means Committee released a comprehensive clean energy tax package that includes a five-year extension of the 30% solar investment tax credit (ITC) and new solar incentives for energy storage.

“This is a positive development for everyday Americans who want access to affordable clean energy,” said Abigail Ross Hopper, CEO of the Solar Energy Industries Association. “The solar investment tax credit enjoys bipartisan support in the House and is responsible for making solar energy an American economic success story. An ITC extension will create thousands of jobs, add billions of dollars in private investment to the economy and reduce emissions. These benefits will be further accentuated with the inclusion of storage in a clean energy tax package.

“While the discussion draft is an important step forward, now is not the time to stop pushing. We still need to make sure solar remains part of any end-of-year deal and our fight isn’t over until an ITC extension is enacted into law,” Hopper said. “This package clearly conveys the sentiment that the ITC should be extended and we commend the House Ways and Means Committee for making solar expansion a priority. We urge Congress to consider this package and pass an extension of the solar ITC.”

Titled the Growing Renewable Energy and Efficiency Now (GREEN) Act of 2019, the 76-page document lays out revisions to tax code that would extend the ITC and creates or maintains incentives for renewable fuels, energy efficiency measures, electric vehicles and investments in a green workforce. The bill was introduced to Congress by Representative Mike Thompson (D-CA).

The ITC is a federal tax subsidy that gives solar-powered system owners a 30% return on a project’s total tax liability in any market segment. It’s scheduled to sunset January 1, 2020, dropping to a 26% tax credit, then 22% in 2021. In 2022, it will decrease to 10% for utility and commercial solar energy projects and expire entirely for the residential solar power market.

“The Ways and Means Committee GREEN Act Discussion Draft represents a thoughtful, constructive and forward-looking approach to clean energy tax policy,” said Gregory Wetstone, president and CEO of the American Council on Renewable Energy. “We are particularly encouraged by the stable tax platform this proposal would bring to the renewable[s] sector, and its critical support for emerging markets like energy storage, electric vehicles and offshore wind. We applaud Chairman Neal and Select Revenue Measures Subcommittee Chairman Thompson for advancing this initiative, and call on Congressional leadership in the House and the Senate to include clean energy tax incentives as part of any must-pass legislation this year.”

Since its enactment, the ITC has encouraged the creation of 242,000 solar energy jobs and $140 billion in investments in the solar power industry alone.

“With more and more members of Congress stepping forward to recognize the urgency of our climate crisis, this package of measures deserves broad support,” said John Bowman, managing director for government affairs at the Natural Resources Defense Council. “We encourage House leadership to quickly bring a package of clean energy extenders to the floor for a vote. This is the one chance we have this year to move true climate legislation.”

Earlier this month, more than 550 business leaders, investors and others from industries and states across the country sent a letter to congressional leadership amplifying the importance of clean energy tax extenders to our economy and our environment.

“After years of uncertainty, this package helps provide clarity and overdue updates to our federal tax code and finally recognizes the importance of some of the newest, most innovative — and badly needed — clean energy technologies available today,” said Sandra Purohit, federal advocacy director for E2. “The market certainty this package provides will help accelerate deployment of renewable energy and clean vehicle technologies that can generate billions in new investments, create thousands of jobs and help our environment as well.”

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