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SEIA Calls On Obama To Revaluate Investment Tax Credit Phase Out

Suggestions of ending the Investment Tax Credit (ITC) for US solar energy projects has the industry’s top official wanting the White House to revise its position.

President Barack Obama released last week in his 2015 fiscal year budget the phase-out of the ITC by December 31, 2016. In its place is the less lucrative Production Tax Credit (PTC).

800px-20110420-RD-LSC-0880_-_Flickr_-_USDAgov

Image Credit: Solar Panels at Seldom Rest Farms via WikiCommons

Rhone Resch, CEO and President of the Solar Energy Industries Association (SEIA), contended that axing the ITC and replacing it with the PTC is a “huge step backward” in developing US solar policy.

“Since the solar ITC became law in 2006, installed solar capacity nationwide has grown from 680 megawatts (MW) to nearly 13,000 megawatts.  That’s enough clean, reliable and affordable electricity to power more than 2.2 million homes,” Resch said on the SEIA website.

“Smart, forward-looking public policies like the solar ITC have helped to create 143,000 good-paying American jobs and pump tens of billions of dollars into the US economy, while helping to protect our environment and fight climate change,” he said.

How less fruitful is the PTC compared to the ITC?

The PTC only provides a tax break of $0.022/kWh on projects. In comparison, the ITC offers developers up to a 30% write-off on operational development costs.

Resch pushed for keeping the ITC in order to further advance future economic growth, as the change in tax policy could hurt future solar investment.

“The PTC simply can’t address the upfront costs of fuel-free solar projects, and we believe the Administration’s sudden, 180-degree shift in tax policy could have devastating consequences on the future development of solar energy in America,” he said.

While the proposed elimination of the ITC may hurt future solar projects, new solar capacity continues to increase.

With a total of 4,751 megawatts of new solar photovoltaic capacity installed last year, solar produced 29% of all new US electricity capacity in 2013, compared to only 10% in 2012. Natural gas with first with 46%.

Some will suggest eliminating the ITC is part of solar energy’s maturing process. However, compared to other energy industries in the past, including oil and gas, solar is still very young and will need strong incentives as it continues to climb up the energy mountain in competing with its fossil fuel counterparts.

For more information, check out our section on solar energy and subscribe to our solar energy newsletter or our main cleantech newsletter.


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Written By

is expected to complete the Professional Development Certificate in Renewable Energy from the University of Toronto by December 2017. Adam recently completed his Social Media Certificate from Algonquin College Continuing & Online Learning. Adam also graduated from the University of Winnipeg with a three-year B.A. combined major in Economics and Rhetoric, Writing & Communications in 2011. Adam owns a part-time tax preparation business. He also recently started up Salay Consulting and Social Media services, a part-time business which provides cleantech writing, analysis, and social media services. His eventual goal is to be a cleantech policy analyst. You can follow him on Twitter @adamjohnstonwpg or check out his business www.salayconsultiing.com.

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