It took a financial crisis, but the U.S. Congress has finally extended the investment and production tax credits that are so vital for the cleantech industry. Congress had long fought over how to pay for the renewable energy tax credits and voted against them eight times this year, but with a $700 billion bailout going to Wall Street, what’s another $18 billion for clean energy? The tax breaks bundled into the bailout include incentives for solar, wind, clean coal, cellulosic biofuels, plug-in hybrids, geothermal, carbon sequestration, marine renewables, fuel cells, and energy efficiency and conservation.
The renewable energy industry has been quick to voice its support of the House’s vote. But the American Wind Energy Association, for example, while acknowledging that the credits will boost energy security and fight global warming, said it’s already thinking about “working next year with a new Congress and Administration to fashion a serious long-term clean energy policy,” since the bailout only extends the production tax credit for wind for one year.
The solar industry was luckier and eked out an 8-year extension for the investment tax credit. Roger Efird, Solar Energy Industries Association chairman and president of Suntech America said in a statement: “By passing this bill, Congress has finally given the solar energy industry ‘policy certainty’ that will attract investment, expand manufacturing and lower the cost of solar energy to consumers.”
Akeena Solar CEO Barry Cinnamon hopes to see an upswing in the solar market almost immediately. “With an eight year extension of the solar investment tax credits and a complete removal of the residential cap for homeowners investing in solar systems – our customers can now realize a full payback of their solar investment in five years instead of 10, delivering a 20 percent return on investment, which in today’s economy is the very best investment homeowners can make,” Cinnamon said in an emailed statement.
The bill also boosts incentives for plug-in electric vehicles, offering up to $7,500 for cars and $15,000 for heavier trucks. “Now automakers and car buyers will no longer see higher up-front costs as a showstopper. In the centennial year of GM’s founding and Ford’s Model T, the auto industry can now enter a century of plug-in cars,” Felix Kramer, founder of The California Cars Initiative, said in a statement.