A tax credit that was commercially and residentially available to the public for solar and wind energy installations was set to expire at the end of 2016 after a 10 year life time. Well, all of that has now changed thanks to the recent victory that was achieved! Lawmakers in Congress have just agreed to a multiyear tax credit extension for solar and wind tax credits. This will increase the amount of solar installations subsequently reducing carbon dioxide emissions!
Last week, on Friday (December 18th, 2015) the white house and the senate agreed to extend the investment tax credits (ITC) of 30 percent for solar energy and 2.3 cents/hour of production for wind energy.
After 40 years of the oil export ban, the republicans demanded an end for it. The solar and wind credit extensions played a big part in lifting this ban. Democrats argued “we need to get something for it”. Rhone Resch, president of SEIA, the Solar Energy Industries Association, said it was our best opportunity, regarding the deal on lifting the ban over the oil export. Although many democrats were against lifting the ban, they agreed it was a great opportunity said they would only support the republicans if they could get the extension for the renewable energy tax credits.
Senator Harry Reid tweeted about this on Friday saying, “We have 2 paths: 1. Pair oil export ban with policies to reduce carbon emissions; 2. Pass gov’t funding without oil/renewables.”
Earlier in 1975, the U.S had banned shipping crude oil out of the country in the time of the Arab Oil wake. The ban was intended protect the U.S from fluctuating prices. However, now that the U.S is a leader in the production of crude oil, many think the door should be opened for exporting in which to encourage expanding production.
Analysts said that these tax credit extensions will put billions of dollars in investments which will create thousands of new jobs throughout the whole country! It will also help with the transition from fossil fuels to renewable energies, such as solar and wind.
The agreement also included to extend for one year a Production Tax Credit for geothermal, landfill gas, and incremental hydro.
“We expect a lot of incremental wind build in Texas and a lot of growth in solar in the Southeast and the Midwest.” said Alex Klein, senior director of Renewable Power Research. As the states try to reduce carbon dioxide emissions, more utilities will be converting large amounts of capital to invest in these technologies, especially since the problem about intermittency and grid interconnections are now solved.
Rhone Resch, president of SEIA, said that a big part of what we need to do is help states understand the value proposition behind solar energy. The investments in the solar sector, according to SEIA, will be able to reach a $40 billion increase between the year 2016 and 2020. The solar employment is also expected to double to 420,000 jobs!