There’s reason for celebration in the renewable energy sector, as a divided Congress pushed through on tax credits for the industry.
The holidays come early for renewables
Tax credits for the solar and wind power sector got an extension until the end of the decade, a huge boost for the sector. Congress passed this multi year extensions just before the holidays, making some dub this a Christmas present for the renewables industries.
The two sectors currently benefit from tax credits to the tune of 30 percent ITC (investment tax credits) in the solar power sector, and a PTC (production tax credit) of 2.3 cents per kilowatt hour in the wind energy sector.
Multi-year extension for solar and wind
While other renewable technologies like small hydropower, marine energy as well as geothermal energy got a year’s extension on their 30 percent investment tax credits as the House and Senate put the credits under review, the big winners were solar and wind.
Republicans were not chuffed at the billions in tax breaks that this extension will yield. However, it would also attract billions in investments to the clean energy sector.
Leaders were reviewing tax measures and joint spending in the sessions last week, with the wind and solar power multi-year extensions approved by a significant majority. President Obama is due to sign off on this in the current week.
Industry analysts and experts predict boom for sector
Expectedly, this news was welcomed by the industry. The American Wind Energy Association director, went on record to say that the stability in policies will give the industry and investors a window to make big strides in wind turbine technology. The tax credits will go towards helping the sector to cut costs, with savings passed on to businesses and homes in America, helping improve uptake as well.
According to data from the Solar Energy Industries Association, the sector should see investments grow by USD 40 billion in the period from 2016 to 2020, with about USD 30 billion each year thereafter.
Others in the industry believe that this is the sign that project developers as well as investors needed. Many predict that this step will help stimulate investment as well business growth, creating more jobs and helping the country move towards adoption of cleaner, renewable technologies for power. It also dovetails well with the EPA’s Clean Power Plan deadlines of 2022, which require utility sector carbon emissions to come down by 2030 to levels that are between 32 percent and 47 percent lower than in 2005. This should encourage more utility companies to make the shift to renewables, giving the sector a further boost.