Maryland Governor Martin O'Malley today signed into law five energy-related bills that aim to promote renewable power and accelerate the creation of green jobs across the state. A number of the new provisions are relevant -- and helpful -- to Maryland solar installations, which is music to our ears...
Ah, what a difference a few weeks can make... For solar energy enthusiasts like us, there has been both good and bad news. Massive volatility in the market has left no sector of the economy untouched. Banks put the kybosh on lending. Otherwise-healthy companies found it harder and harder to raise funds by issuing debt. And, when panic hit the stock market, the value of companies' equity dropped like a rock. Combined with a worsening outlook for the U.S. economy, these events clearly constitute the bad news.
After being voted down no fewer than seven times by the House of Representatives (and ten in the Senate), the bill to extend renewable energy tax credits past 2008 has finally passed. President Bush has said he will sign the bill, so the future looks--well, sunny.
The bill maintains the 30% tax credit for commercial installations of eligible renewable energy technologies, like solar and wind, and does something of momentous importance to the average citizen: it continues to extend that 30% credit to residential customers while removing the cap of $2,000 the previous legislation had imposed. Up until now, if you wanted to install solar in your home and spent $40k on a system, you could only claim a $2k tax credit federally; now, you'll be able to claim the full $12k. It's a huge stride forward in encouraging residential adoption of renewables.
And it's amazing news for utilities, which under the 2005 legislation were not able to benefit from this credit but now can. This will hopefully lead to utility-scale renewables finally finding purchase in states where the finances simply were not appealing when compared to tax breaks the utilities could get for developing coal, oil and gas. The news isn't quite as good for wind, whose ITC's were only extended for one year, as opposed to solar's remarkable eight.
What changed the fate of this legislation, whose future looked so bleak not even a week ago? It got bundled into the emergency bailout legislation intended to alleviate our current financial crisis. It seems that the urgency of the bailout plan, along with its expectation that the parties would be doing everything in their power to find common ground, gave it just the push it needed to finally move forward. Divided along party lines as recently as Monday, Congress decided to go through with the $700 billion bailout due to the prevailing sense that the economy had no other effective route to recovery. On Monday, the vote was 228-205; today, it was 263-171. The Senate, after rewriting the bill to include the renewable energy legislation, passed it on Wednesday night by a wider margin of 74-25.
Visit the Solar Energy Industries Association (SEIA) to learn more about what this means for the solar industry in America. What we've been handed is the ability to maintain our competitive edge in the global solar market, and to pursue strategies of energy independence here at home.
If you've been following the renewable energy tax credit's epic journey through this nation's two legislative chambers, you'll know the industry's hopes for an extension were dashed for the sixth time on Monday. If you're just tuning in--bored of the financial mayhem elsewhere, perhaps?--take a look at Adam's great recap from earlier this week.
It appears as if the solar tax credit may not be doomed, after all. The Wall Street Journal reports that a bi-partisan effort is underway to push the credit in as part of a wider suite of legislation.
For this week and next week, the news services will focus on the Democratic and Republican conventions, respectively. From now until Election Day, observers can expect to see discussion of climate change policies and technologies attached firmly to discussion of the relative merits of Barack Obama and John McCain's energy proposals.