Industry will seek extension of tax credit set to plummet next year 

Source: Daniel Bush, E&E reporter • Posted: Thursday, January 22, 2015

Solar energy industry officials yesterday said they will seek an extension of a tax credit that is set to drop by two-thirds in 2016, adding another potentially contentious issue to the growing energy debate in Congress this year.

Solar producers will lobby lawmakers to extend a 30 percent investment tax credit for commercial-scale projects that drops at the end of next year, said Solar Energy Industries Association President and CEO Rhone Resch.

“We are looking for an extension beyond 2016,” Resch said yesterday at an energy forum in Washington, D.C.

If Congress doesn’t act, the tax credit will fall to 10 percent beginning in 2017. Advocates say the tax credit has helped drive a solar energy boom in the United States since the policy was established in 2008.

Utility companies and others argue that the tax credit — and laws that allow solar producers to sell energy back to the grid in a process known as net-metering — has placed a strain on the nation’s power system.

Resch said it’s the industry’s goal to “wean” itself off government subsidies once solar grows to scale.

The industry has added 80,000 new jobs since 2010, and in the third quarter of last year alone accounted for 36 percent of new installed energy capacity in the United States.

But despite its growth in recent years, the industry still represents roughly 1 percent of overall domestic energy generation, Resch said. That figure is expected to grow to 1.6 percent by 2016, when the industry hopes to have 12 gigawatts of solar energy online across the country.

“Ultimately, what we are trying to do as an industry is wean ourselves off a support network and subsides,” Resch said.

The industry is also seeking to settle a long-running trade dispute with China over the price of imported solar panels, Resch said, as well as domestic policies that improve financing for solar projects.

Solar advocates will also have their hands full this year defending renewable energy standards in states like North Carolina that are considering rolling back mandates for solar, wind and other alternative power sources.

Still, it’s unclear what role, if any, solar energy will play in the larger energy debate already underway on Capitol Hill this year.

In addition to the high-profile fight over the Keystone XL pipeline playing out in the Senate right now, GOP lawmakers are also planning to take up a comprehensive energy bill being crafted by Senate Energy and Natural Resources Chairwoman Lisa Murkowski of Alaska and House Energy and Commerce Chairman Fred Upton of Michigan.

Last week, independent Sen. Bernie Sanders of Vermont introduced an amendment to the Senate’s KXL bill that would provide rebates for the installation of residential and commercial solar projects. The measure would help create 10 million new solar energy systems over 10 years, Sanders said.

The legislation, which Sanders has introduced in the past, was co-sponsored by Democratic Sens. Robert Menendez of New Jersey and Sheldon Whitehouse of Rhode Island.