Congress votes to extend solar tax credits through 2011

A few weeks earlier, we posted about the looming expiration of clean energy tax credits in America.  But last week, Congress voted on a massive tax bill that includes extension of solar tax credits in the USA.  The federal solar grant program is alive for at least another 12 months!

Under the terms of the new law, you now have until December 31, 2011 to begin work on a solar power project and apply for investment tax credits that will allow you to recoup up to 30% of the costs through the solar tax credit.  Not only does that take the pressure off solar contractors and business owners that were rushing to get solar power projects under way before December 31, 2010, but solar companies are celebrating the fact that they should be able to retain the green jobs that were recently created, and possibly even increase hiring in the New Year.

Oregon tree blossoms on solar panels

It almost goes without saying to someone like me that Oregon leads the nation in solar.  All over my hometown, I see solar panels installed on homes and businesses.  One of the best known solar power converter manufacturers, PV Powered, is frequently in the news and hosted Obama’s visit to Bend, Oregon in May 2008.

Solar development is taking place all over the state, however, not just in Central Oregon. In Hillsboro, Solar World has the largest solar cell manufacturing facility in North America.  Solaicx, a silicon manufacturer for solar energy applications, is located in Portland.  Finally, the state capital, Salem, is home to Sanyo Solar.  These corporations and projects would not be sited in Oregon if it was not for the state’s leadership with respect to solar innovation and investment.

In fact, Solar World just hosted a booth at the “Everything Green” Expo in Portland last week:

Rearview as Oregon leads the way in solar investment

One of the reasons for the recent solar growth in Oregon is the fact that the Oregon Lottery has been investing considerable funds in the industry.

Proceeds [from lotto ticket sales] are going to help fund the construction of solar projects that will provide clean, renewable power for more than 180,000 households.  Over the next five years, there will be 2,000 new jobs in Oregon in the solar power industry as a result of lotto proceeds.

Another impetus for solar development here is the Governor’s call for 25% of all energy to be provided by renewable energy resources by 2025.  Even better, Governor Kulungoski has challenged the state to see that 100% of its buildings are energized with green resources during that same time period.

Of course, it helps that the tax credits in Oregon are especially generous with respect to solar and other renewable energy development.  Explains Tom McCabe, Director of the Oregon Economic and Community Development Department:

“During our last legislative session, we introduced a Business Energy Tax Credit to attract renewable energy manufacturers,” says McCabe. Renewable energy companies can save up to $20 million per year in tax credits by availing the benefits of this legislation. He is also optimistic about the targeted recruitment efforts which have already resulted in the adding up of about new 60 companies in this sector.

For residents and businesses, the cost of going solar can be reduced by up to 50% or more.

As a lifelong resident of the Pacific Northwest, I can see why many people here are invested in a clean, green future.  Crystal blue lakes and streams, gorgeous snow-capped mountains and an active, outdoor lifestyle are all available to people who live here.  It makes sense for Oregon to lead the nation in solar development.  After all, we cannot take this paradise for granted.

Mt. Hood, Oregon

As a resident and taxpayer of Oregon, I have always paid close attention to proposed tax legislation.  I am not shy to jump into the debate regarding new taxes, either.  Of course, because I am a solar power proponent, I was particularly interested in a recent show on Oregon Public Broadcasting (OPB) on which state solar tax credits and incentives were debated.

As part of Congress’s $700 billion bailout, federal solar tax credits were extended.  Subsequently, Oregon Governor Ted Kulongoski announced that he wanted to expand state renewable energy tax credits in order to help address global warming.  As with many political moves, Kulongoski’s statement ignited a newsworthy debate in Oregon regarding solar tax credits and incentives.  The fundamental question at issue is whether consumers should be taxed to provide incentives to solar project developers.  Who should pay for renewable energy projects?

Blue skies in Oregon

Cascade Policy Institute, a right-leaning organization, claims that solar tax credits provide “winners” and “losers” and ultimately reward the wrong technologies.  Its energy expert, Todd Wynne asserts that, if people want to invest in renewable energy options, they can check the “green power” box on their utility bill (for example, Pacific Power has a “Blue Sky” program that costs an additional $1.95/month for most consumers).  Wynne says:

“Citizens are showing that they don’t want to pay more for power, even though there’s these supposed environmental benefits for renewable power. They’re showing by action they don’t want it, however, the government mandates exactly what the people don’t want.”

Also opposed to solar tax credits, but for different reasons, is Tax Fairness Oregon.  Its representative, Kris Alman, states that government should invest in renewable energy projects, but believes that solar tax credits unfairly benefit investors.  Alman observed:

“If we’re using our tax and ratepayer dollars, and they’re getting more into investor hands, as a sure-fire deal as something they’re going to win as an investment, yet what we’re supposed to say is ‘it’s okay.’ That to me doesn’t make sense because in the end, we should be getting something more than a good green feeling out of this.”

Crater Lake National Park, Oregon

She does agree with Solar World and other industry leaders’ proposal to allow consumers to sell back excess electricity generated by solar panels to utility companies.  Currently, Oregon residents can get credit on their utility bills, but cannot sell extra energy back to utilities for a profit.  A pilot program was announced by Kulongoski, and makes perfect sense to me!

“This pilot program will provide incentives to homeowners and businesses that conserve part of the solar energy they produce, by allowing them to put the energy they conserve back into the grid. I believe this program will significantly accelerate Oregon’s use of solar energy.”

The only “hitch,” if you will, is that the entire United States grid system would have to be standardized to allow the sell-back of excess solar energy generated by homes and businesses.  Not only would that require federal legislation, but opposition from many utilities is expected to slow any potential new laws in this regard.

Still, its a new day – a New Year and a new Administration about to take office in Washington, D.C.  Many elected officials are hopeful that, both in Oregon and nationwide, standardized systems may soon be a reality which can provide just the incentives many may need to convert to solar energy.

What do you think about the solar tax credit debate?