Today (Dec. 15) was already a decent day for the solar industry. The California Public Utilities Commission (CPUC) decided to keep net metering in the nation’s largest and most populous state, which also is the largest solar market in the country. At the same time whispers in Washington, D.C., suggest that the tax extenders legislation being debated in Congress may include an extension of the Investment Tax Credit (ITC) in a meaningful way. That would help ensure tens of thousands of jobs across the country wouldn’t be lost if the ITC expires, as planned, at the end of 2016.
The ITC has helped solar be more attractive in the U.S. by offsetting 30 percent of the costs of solar panels and equipment for an array. The credit was created during the George W. Bush era in 2005 and was set to end for homeowners and be reduced to 10 percent for commercial and larger solar systems. It was extended in 2008.
When the ITC was extended it wasn’t designed to be stepped down, which would provide a softer landing pad for the solar industry. Unlike other industries in the energy sector, like coal and oil, most in the solar industry anticipate a day when solar power will be a competitive energy source without subsidies. However, ending the subsidies abruptly could hamper the solar industry in the short term and cost jobs while and extend the amount of time it will take solar to reach parity with other energy sources without subsidies.
Solar Energy Industries Association’s (SEIA’s) Dan Whitten, SEIA vice president of Communications wrote to solar supporters today, expressing the hopes of the industry. “I wish I could break some news for you this afternoon on the fate of the Solar Investment Tax Credit in congressional negotiations, but alas, reports suggest that no legislation will be released until late tonight, and so we wait.” He added, “Reports have varied, but generally they are pointing to a meaningful extension of the ITC. Still unsettled is what the terms of that extension will be. It is not a foregone conclusion that a deal actually will be struck, and so I’m afraid that some of us may be up for another restless evening.”
The hopes that something could be accomplished on the federal level boosted solar stocks. “Shares in SunEdison rose 12.6 percent to $5.05. Sunrun shares rose 4.3 percent to $9.49 after rising to $11.29,” Rueters reported. They were also perhaps buoyed by the news out of California, which already has more than 450,000 rooftop systems installed and more than 10 gigawatts of solar installed across the state.
“Gov. Brown’s PUC is standing up for clean power and for customers by proposing to reject the utilities’ attempts to make solar out of reach for customers,” said California SEIA’s Executive Director Bernadette Del Chiaro. The proposal will maintain net metering at a customer’s full retail rate but adds other fees that CalSEIA opposes. It approved a one-time interconnection charge, which is estimated in the range of $75 to $150.
“The Commission has worked tirelessly to review a mountain of comments and testimony and we are pleased that their review has led them to affirm the importance of continuing net metering,” said Sean Gallagher, SEIA’s Vice President of State Affairs. The commission has just published the proposal but hasn’t made final decisions.Tweet