BluefoxToday blog : Mortgage bailout gives a needed break to nascent solar industry

Mortgage bailout gives a needed break to nascent solar industry

For months solar energy proponents have been trying to pass in the U.S. Congress a bill that would extend the existing tax incentives. At least that and perhaps even improve on them. What's in the books now will expire by the end of the year and it appeared as if the desired extension wasn't going to happen. The fossil fuel energy producers form a powerful lobby and obviously they stood in the way.

But as Wall Street so splendidly disintegrated and Washington needed to quickly get a bailout package passed, solar supporters decided to try one more time and managed to slide a new extension provision into the bill. And the rest is history. It's a done deal and all of a sudden it gives new life to the industry. Senator Reid from Nevada, long known to be a solar advocate to help his state and the country with energy issues, is rumored to be one of the main catalysts to get this thing passed.

Homeowners buying rooftop solar sets will get a 30% tax credit for eight more years. Besides that, the previous cap of $2,000 was amended and now it could go much higher. If a rooftop solar system is installed at a cost between $25,000 and $30,000, that's about the average for one, the tax credit now approaches $9,000. That is a significant hike and ought to spur more interest in the concept. Given the current mortgage and real estate turmoil many homeowners probably have their sights aimed at other issues at this point but once the market improves, the industry should be ready to take off in a big way.

Commercial firms that install solar systems will enjoy the same 30% tax credit for another eight years. The current investment tax credit was also extended by eight years and should help reduce the cost of developing solar technology and thus eventually bring grid parity to the market. This means that electricity produced by solar means costs the same as fossil-fuel generated power. Indeed, some experts predict that it could take place as soon as 2015. From there on solar could really cruise into the mainstream as the power of choice.

States that currently have a solid base of solar energy manufacturing are the ones that will benefit the most, at least in the early going, from the extension's passage. According to Navigant Consulting they are Arizona, California, Florida, Massachusetts, Nevada, New Jersey, New Mexico, New York, Oregon and Washington. Right now around 60,000 people are working in the trade, reports Solar Energy Industry Association, and with the extension that number is expected to rise quite a bit.   

 

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Provided by: 

Esko Kiuru
Mortgage, real estate and apartment industry analyst 

www.BluefoxToday.com - syndicated mortgage, housing and property management blog

eskokiuru@gmail.com
My cell: 702-499-1006

Comment balloon 6 commentsEsko Kiuru • October 14 2008 05:04PM

Comments

Hi Esko,

Is that a national tax credit at 30%?

Posted by Sabrina Kelley, Woodland Park Colorado Mountain Homes and Land (ERA Herman Group Real Estate) about 10 years ago

Jeff good to hear something positive coming out of all this.  It is sad that it takes a tragedy to get something positive done.

Posted by George Souto, Your Connecticut Mortgage Expert (George Souto NMLS #65149 FHA, CHFA, VA Mortgages) about 10 years ago

Esko, that is great to hear. It's difficult to keep up with what goes in those bills. That's the problem. They are really conglomerates that include all kinds of things that have nothing to do with the title of the bill. In this case, apparently something actually helpful was put in.

Posted by Sharon Alters, Realtor - Homes for Sale Fleming Island FL (Coldwell Banker Vanguard Realty - 904-673-2308) about 10 years ago

Sabrina,

Anyone installing a rooftop solar system will be eligible for the 30% tax credit.

Posted by Esko Kiuru about 10 years ago

George,

There are some good nuggets in the bill.

Posted by Esko Kiuru about 10 years ago

Sharon,

Even those who put the bill together probably don't know what all is in it.

Posted by Esko Kiuru about 10 years ago

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