RELEASE: Consequences of a Failure to Extend the Solar ITC
Eliot Kersgaard (PR Director)
303-304-4659 | [email protected]
Daren Goldin (CEO)
305-469-9790 | [email protected]
Breaking- ITC Extension Leaves Committee
November 19, 2019 —
Select Revenue Measures Chairman Mike Thompson (D- CA) released the GREEN Act of 2019, which would extend the solar ITC by five years.
Public statement from Daren Goldin on the GREEN Act:
“The release of the GREEN Act of 2019 by the House Ways and Means Committee is a critical step toward a successful ITC extension. We are hoping for speedy action on the House floor so this bill can reach a vote. Success for the GREEN Act will mean more money in average American’s pockets, a cleaner energy future, and a more robust renewables sector. For those unable to make solar work for them in 2019, the GREEN Act gives additional time a homeowner might need to install solar and start saving money.”
Summary of ITC Expiration Consequences
- The Solar Investment Tax Credit (ITC) is set to reduce from 30% to 26% on January 1, 2020.
- Extending the ITC would offset of 363 million metric tons of CO2 over the next 10 years, increase solar generation capacity by 82 GW of additional solar generation capacity, create $87 billion in private investment and 113,000 new jobs (Solar Energy Industries Association).
- Extending the ITC has support from lawmakers in Congress, mayors across the country, and solar industry leaders. The next step for extension is floor action on the GREEN Act of 2019.
- The best time in the foreseeable future for a homeowner to go solar is right now.
Background of the Solar Investment Tax Credit (ITC)
The ITC is an incentive program which allows homeowners and businesses to receive a tax credit for purchasing solar. It was implemented in 2006 to help slow the release of toxins and greenhouse gases from fossil fuel mining, processing, and combustion by making solar energy cost competitive with fossil alternatives.
Since its implementation, the solar industry has grown 100-fold yet still only comprises 2.5% of generation capacity in the United States. The tax credit has led to the creation of over 200,000 jobs and $140 billion in private investment (Solar Energy Industries Association).
2020 Decrease in the ITC
The ITC rate is currently 30%, resulting in a credit of $9,000 for the average homeowner when they go solar. On January 1, 2020, the credit will reduce to 26%, reducing savings to $7,800 per residential installation. Goldin Solar CEO Daren Goldin explains the consequences for the average Florida homeowner:
“The reduction of the tax credit by $1,200 will make going solar a more difficult option for the average Florida homeowner at the start of 2020. Today, someone can easily put $0 down on a solar system and have their loan payments be equal or less than their previous utility bills. The reduction of the ITC will make this cost saving more difficult to achieve for the average Floridian.”
At a national scale, the reduction of the tax credit will lead to slower adoption of solar technology resulting in increased greenhouse gas emissions, a greater ozone threat, and a stalled renewable economy. By the numbers, an ITC extension would result in:
- A decrease in NOx emissions (precursors to harmful ozone) by 480,000 metric tons per year. Florida is one of the highest-risk states for these emissions (Shen et al, 2019)
- An offset of 363 million metric tons of CO2 emissions over the next 10 years, equivalent to taking 77 million cars off the road or taking 93 coal plants offline
- 82 GW of additional solar generation capacity, enough to power more than 15 million American homes
- $87 billion in private investment and 113,000 new jobs (Source)
Renewal of the ITC is possible but time is running out and significant barriers remain. In July, 100 House Democrats delivered a letter to the House Ways and Means Committee to consider extension of the credit. Lawmakers in the Senate and the House have introduced legislation to extend the 30% rate past January 1. The legislation is currently in committee. In October, 166 House Democrats delivered a letter to Speaker Pelosi and Majority Leader Hoyer voicing their support for an ITC extension.
Previous authors have pointed out that extending the tax credit would be a renege of a previous deal struck by Congress in 2015: “At that time, Democrats agreed to end the 40-year export ban on crude oil in exchange for an extension on the solar ITC and similar wind power incentives. As part of that bipartisan deal, Democrats agreed the 2015 extension would be the last.”
However, the House members which delivered the July letter to committee noted that:
“However, for many of us who served in 2015 when that bipartisan, bicameral agreement was reached, the facts on the ground have now changed demonstrably . . . The Trump Administration’s efforts to undermine the CPP and other commonsense safeguards for new and existing power plants, relax fuel economy standards for cars and trucks, curtail potent methane emissions, and withdraw the United States from the Paris Climate Accords have fundamentally altered the framework by which the 2015 agreement was reached. As such, we would encourage the Ways and Means Committee to continue tax incentives for clean-energy technologies in order for the United States to remain on track to meet its commitments under the Obama Administration to the Paris Climate Accords.”
In the House Ways and Means committee (responsible for moving the legislation through the lawmaking process or, by inaction, destroying it), are two Florida representatives, Congressperson Stephanie Murphy (D, Orlando/Winter Park) and Congressperson Vern Buchanan (R, Sarasota).
An additional show of support for extension came from a letter of concerned mayors delivered to Congress in October. 15 Florida mayors including Buddy Dyer of Orlando and Rick Kriesman of St Petersburg joined 216 other mayors from across the country in delivering a letter urging ITC extension. Regarding his position, Mayor Woody Brown of Largo stated:
The solar ITC is a necessary tool that strengthens the ability of our residents and business owners to make this transition, particularly the most vulnerable across our community.
Despite the shows of support from policymakers and industry, Goldin says that homeowners won’t benefit from waiting to see if the extension passes:
“The fact is, the best time for a homeowner to go solar is right now. Even if the extension passes, choosing solar now instead of waiting until 2020 will save you money. Regardless of an ITC extension or improvements in technology, solar is mature enough to make it economical right now. If you’re waiting to go solar for any reason, the time you’re waiting is time you don’t have a solar system on your roof saving you money and reducing your carbon footprint.”
Who to Contact Regarding this Release
Director of Public Relations, Goldin Solar
CEO, Goldin Solar