U.S. Senators Michael Bennet (D-CO) and Dean Heller (R-NV) on Feb. 6, introduced a bipartisan bill to help more solar companies benefit from the tax advantages of investing in solar projects. The proposal would allow firms to qualify for the Investment Tax Credit (ITC) for solar projects that are under construction before the credit’s expiration date, rather than having to wait until those projects are completed and in service.
“Investing in alternative energy sources cuts right to the core of whether and how we want to compete in the global and changing economy,” Bennet said. “This bill allows us to make an important investment in our diverse energy portfolio and supports tens of thousands of Colorado jobs. As Congress considers comprehensive energy tax reform, we ought to provide certainty in the interim by extending the existing slate of renewable tax credits and providing parity for the solar industry. With over 300 days of sunshine in our state, we should absolutely be taking advantage of this valuable energy source.”
“The sun shines almost every day in Nevada, and we have tremendous solar energy resources. Providing every tool necessary for companies to develop solar energy will help us harness our vast potential,” said Senator Dean Heller. “Putting solar on the same playing field as other important Nevada resources, like geothermal, is critical to our state’s and our nation’s long-term all-of-the above energy strategy. I look forward to working with Senator Bennet as we move this bill forward.”
Currently, in order for a project to qualify for the ITC, it must be “placed in service” by December 31, 2016, meaning it must be complete and capable of generating power. The Bennet-Heller bill would replace this requirement to allow projects meaningfully under construction to be eligible for the credit, similar to a change made to the Production Tax Credit (PTC) in 2012. This is especially helpful for large-scale projects that could take several years to develop, permit, finance, and build.
“Changing the ITC eligibility to commence construction will enable the industry to build new solar power plants that will create jobs in Colorado and other states, and bolster US manufacturing throughout the country,” said Frederick Redell, General Manager of Abengoa Solar in the U.S., which is headquartered in Lakewood, CO. “During their operation, these solar power plants will provide clean power to tens of thousands of homes and diversify the U.S. energy supply contributing to the energy independence of the country in a sustainable manner.”
The Western Governors’ Association (WGA) also strongly supports modifying the ITC for projects under construction. In a letter to the Senate Finance Committee and the House Ways and Means Committee, WGA Chairman and Colorado Governor John Hickenlooper and WGA Vice Chairman and Nevada Governor Brian Sandoval wrote, “Over the past eight years the ITC has been tremendously successful in growing clean energy industries in our states and across the United States, creating American jobs, expanding solar and other Section 48 technologies across the country, and driving down prices for American consumers. With a compound annual growth rate of 77 percent since 2006, the solar industry alone is supporting more than 119,000 American jobs in all 50 states, and contributed $11.5 billion to the U.S. economy in 2012. The ITC has been particularly effective in catalyzing economic growth in Western states.”
“This legislation is critically important to the continued growth of solar energy in America,” said Rhone Resch, president and CEO of the Solar Energy Industries Association (SEIA). “Senator Bennet has been a long-time champion of solar, which today is the fastest-growing source of renewable energy in the United States, providing jobs for nearly 143,000 Americans and pumping tens of billions of dollars into the U.S. economy. We applaud Senator Bennet for his strong leadership and look forward to working with him on ways to create new jobs in Colorado, bolster local economies and protect our environment.”
Both Colorado and Nevada are leading the way in the development of solar energy technology. Colorado has more than 328 solar companies employing upwards of 3,600 people. In Nevada, 79 solar companies are supporting 2,400 workers. In 2012, over $200 million was spent in these two states alone to install solar technology on homes and businesses.
The ITC also covers other renewable energy technologies, including fuels cells, microturbines, combined heat and power, and small/offshore wind.