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.