In the last few weeks President Obama (D) has stepped up his efforts to fight climate change and support renewable energy like solar and wind. Now in the 2016 budget he’s proposed something the entire solar industry has asked for for years—permanence in the Investment Tax Credit (ITC). He also proposed making the Production Tax Credit (PTC) permanent. The PTC can be used for solar, but is primarily used to support wind farms.
The moves would give solar and wind power the same status of permanent tax breaks that other forms of energy already enjoy in the U.S. For instance, oil and coal have received tax breaks for many many decades.
Currently the ITC, which rebates 30 percent of a solar system’s cost now, is set to decline to 10 percent of a system’s cost at the end of 2016 and to sunset after that. It is not clear whether the Obama budget proposal seeks to keep the ITC at its current level or at the lower level.
“We applaud President Obama’s recommendation to make the solar ITC a permanent part of our nation’s tax policy,” said Solar Energy Industries Association (SEIA) President Rhone Resch. “Without question, it represents a major investment in America’s future.”
“Since first being enacted in 2006 at SEIA’s urging, the solar ITC has been a tremendous boon to both the U.S. economy and our environment. Today, the solar industry employs nearly 175,000 Americans, pumps $15 billion a year into our economy,” Resch stated. “In the past four years, employment in the solar industry has increased by more than 85 percent—and last year alone, we created one out of every 78 new jobs in America. What’s more, our industry now supports approximately 700,000 U.S. jobs through indirect and induced impacts. This remarkable progress is due, in large part, to smart and effective public policies like the solar ITC. “
The latest news would increase renewable energy investments from the $6.5 billion approved for the 2015 budget. “To support the development of pollution-cutting technologies, the budget invests approximately $7.4 billion in clean energy technology programs, advancing American clean energy leadership, supporting job creation, and increasing energy security,” the 2016 budget stated. Supporting the programs will allow the U.S. to conduct research, develop and deploy efforts that “stimulate the evolution and use of clean energy sources such as solar, wind, and low-carbon fossil fuels, as well as energy-efficient technologies, products, and process improvements.”
The majority of the funds will come from the Department of Energy. But other agencies including the Department of Defense, the National Science Foundation and the US Department of Agriculture will all have a role in supporting clean energy.
In addition the President also proposed $4 billion to help encourage states to reduce the amount of carbon they emit through The Clean Power State Incentive Fund. “This funding will enable States to invest in a range of activities that complement and advance the Clean Power Plan, including efforts to address disproportionate impacts from environmental pollution in low-income communities and support for businesses to expand efforts in energy efficiency, renewable energy, and combined heat and power through, for example, grants and investments in much-needed infrastructure,” the proposal stated.
The budget must be approved by Congress, but Republicans are skeptical and may vote against approving such measures.Tweet