Lawmakers in the House and Senate passed a spending package today that includes multi-year extensions of solar and wind tax credits, plus one-year extensions for a range of other renewable energy technologies.
The pair of bills, which included tax extenders and $1.1 trillion in funding to keep the government running for the next year, passed hours before lawmakers adjourned for the holidays.
“May the force be with you,” said Senator Dianne Feinstein, urging her fellow Senators to vote in favor of the package shortly after the House approved the bills.
The force was certainly with renewables.
Under the legislation, the 30 percent Investment Tax Credit (ITC) for solar will be extended for another three years. It will then ramp down incrementally through 2021, and remain at 10 percent permanently beginning in 2022.
The 2.3-cent Production Tax Credit (PTC) for wind will also be extended through next year. Projects that begin construction in 2017 will see a 20 percent reduction in the incentive. The PTC will then drop 20 percent each year through 2020.
Also included were geothermal, landfill gas, marine energy and incremental hydro, which will each get a one-year PTC extension. Those technologies will also qualify for a 30 percent ITC, if developers choose. In addition, the bill expanded grants for energy and water efficiency.
Business groups and analysts say the extensions will support tens of billions of dollars in new investment and hundreds of thousands of new jobs throughout the U.S.
“There’s no way to overstate this -- the extension of the solar ITC is the most important policy development for U.S. solar in almost a decade,” said MJ Shiao, GTM’s director of solar research.
According to GTM Research, the ITC extension will help spur nearly 100 cumulative gigawatts of solar installations by 2020, resulting in $130 billion in total investment. More than $40 billion of investment will be “directly attributable to the passage of the extension,” said Shiao.
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