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December 9, 2006
Solar Energy Industries Association
(WASHINGTON,
DC) - In its waning hours, the 109th Congress today passed legislation
that would extend the 30% solar energy investment tax credit (ITC) for
homeowners and businesses for one additional year, through the end of
2008.
The Solar Energy Industries Association (SEIA) applauded
the one-year extension of the solar ITC in H.R. 6111, the "Tax Relief
and Health Care Act of 2006." At the same time, the industry cautioned
that the lifespan of the credits is too short to encourage significant
industry growth and cost reductions.
"While this bill does not
constitute a long-term solar growth policy, it does provide some
breathing room for solar projects in the 12- to 18-month pipeline,"
said Rhone Resch, SEIA President. "It ensures that the solar industry
will continue to grow at a record rate in 2007. The passage of this
bill with an extension of the solar ITC is recognition by Congress that
solar is indispensable to our clean energy future."
An
eight-year extension of the ITC will remain the solar industry's top
legislative priority in 2007. A long-term extension is essential to
reducing the cost of solar energy, as it would create market conditions
that allow solar companies to make investments and drive down costs
through economies of scale. A longer duration will also be needed to
help stimulate the development of large-scale concentrating solar power
projects.
SEIA's Resch expressed optimism that the 110th Congress would enact an eight-year extension as contained in S. 2677 and H.R. 5206, the "Securing America's Energy Independence Act," a bill which gained a bipartisan group of 80 House and 15 Senate
cosponsors this year.
"This
bill is a patch, and emphasizes the importance for Congress to enact
long-term, comprehensive clean energy legislation when they return in
January," said Resch. "We look forward to working with the next
Congress, to craft a comprehensive and effective policy blueprint for a
self-sustaining clean energy infrastructure in the United States."
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The bill contains the following provisions:
Residential
Solar Tax Credit: Extends a 30-percent tax credit, created in the
Energy Policy Act of 2005, for the purchase of residential solar water
heating, photovoltaic equipment, and fuel cell property. Expires after
December 31, 2008.
Business Solar Tax Credit and Fuel Cell Tax
Credit: Extends a 30-percent business credit, established in the Energy
Policy Act of 2005, for the purchase of fuel cell power plants, solar
energy property, and fiber-optic property used to illuminate the inside
of a structure. After December 31, 2008, the credit reverts to a
permanent 10-percent level.
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