Since 2006, the US federal Investment Tax Credit (ITC) has been an instrumental part of the widespread adoption of solar energy, both for residential and commercial buildings, and has been integral in creating some 150,000 jobs in the U.S. as well as pumping nearly $70 billion into the economy.
But the sunset of that 30% solar tax credit is looming, and if the ITC isn’t extended, the residential tax credit will drop to zero and the commercial solar credit will drop to 10% after December 31, 2016, which could bring about a 71% decline in solar deployment in the U.S.
To help gather support for the extension of the solar Investment Tax Credit, the Solar Energy Industries Association (SEIA) is advocating on behalf of the more than 1000 companies representing the U.S. solar value chain:
According to the SEIA, the extended ITC has had a huge positive effect on the solar industry and the nation’s clean energy momentum:
- The ITC has fueled dramatic growth in solar installations. The market certainty provided by a multiple-year extension of the residential and commercial solar ITC has helped annual solar installation grow by over 1,600 percent since the ITC was implemented in 2006 – a compound annual growth rate of 76 percent.
- The ITC has fueled dramatic job creation. Solar employment has grown by 86% in the last four years and is creating jobs at a rate nearly 20 times higher than employment growth in the overall economy.
- The cost of solar for consumers has continued to fall. The existence of the ITC through 2016 provides market certainty for companies to develop long-term investments that drive competition and technological innovation, which in turn, lowers costs for consumers.
If you’d like to see an extension of the federal solar Investment Tax Credit, SEIA offers an easy way to send an email to your Representative asking for their support for the bill H.R. 2412, which will effectively extend the ITC for residential, commercial and utility-scale projects for five years. A full analysis of the impact of the ITC on the industry, and the nation, is also available at SEIA.