Expiring federal tax credit threatens solar industry
Rhone Resch is president and CEO of the Solar Energy Industries Association. - photo by File photo
With the state's Solar Power Free Market Financing Act now law, Georgia is expected to have a banner year for new solar installations in 2015. But after that, the future begins to look murky because of the looming expiration of the federal investment-tax credit for solar energy.
In fact, the uncertain fate of the solar-tax credit is beginning to create real angst in the marketplace and could result in the elimination of many good-paying jobs across the state in the future.
By contrast, with the tax credit still in place, Georgia is expected to quadruple the amount of new solar capacity added this year compared to 2014. The state is now on pace to install 235 megawatts of solar capacity this year alone. That's a huge jump — 10 times more than was installed in Georgia in 2011. By the end of this year, Georgia is expected to have nearly 400 MW of installed solar capacity — enough to power more than 43,000 homes.
Clearly, effective public policies, like the federal tax credit and Georgia's new solar-financing law — which makes it easier and more affordable for homeowners, businesses, churches, schools, military facilities and police and fire departments to "go solar" — will provide a tremendous boost to the state's economy, generating hundreds of millions of dollars a year in economic activity.
Because of the strong demand for solar energy, thousands of new, good-paying jobs are expected to be added in Georgia over the next two years, benefitting the state's economy and environment. To put Georgia's remarkable progress in some context, the 235 MW of solar capacity projected to be installed in the state this year is nearly half as much as our entire country had in 2004!
Much of this economic activity is a direct result of the federal investment-tax credit. Consider what's occurred since it was enacted in 2006:
• 150,000 new solar jobs have been added across America;
• Enough new solar capacity has come online to power 4 million homes;
• More than $66 billion has been invested in new solar installations; and
• One-third of all new electricity added to the U.S. grid last year came from solar energy.
Today, there are 173 solar companies at work throughout the value chain in Georgia, employing more than 2,900 people. What's more, from an environmental perspective, solar installations in Georgia are helping to offset more than 186,000 metric tons of harmful carbon emissions, which is the equivalent of removing 39,000 cars from the state's roads and highways, or not consuming 21 million gallons of gasoline.
As it stands now, the 30 percent federal investment-tax credit will expire at the end of 2016, threatening to derail the rapid progress solar energy is making across Georgia. By contrast, competing energy sources, such as fossil fuels, have had preferential treatment in the U.S. tax code for up to 100 years, while solar energy has had the federal tax credit as an incentive for private investment for fewer than 10 years.
As an industry, we're strongly urging Georgia's congressional delegation to support extending the investment-tax credit for at least five years.
By then, many analysts predict, solar energy will reach grid parity in most electricity markets, helping to create a level playing field among energy producers, which will benefit consumers, the U.S. economy and the environment. That's a win-win in anyone's book.