Tag Archives: Tax credits

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Solar Tax Incentive May Be Cut

Solar Power in the Grand Canyon, 5 December 2010

Solar Power in the Grand Canyon, 5 December 2010

We received the alert below from the good folks at The Vote Solar Initiative:

Last night the President announced an agreement with Congress on extending tax cuts and unemployment benefits. Our friends at SEIA have been working to make sure an extension of the Section 1603 Treasury Grant Program for solar was included. It’s a critical bit of tax policy that the solar industry needs to keep momentum, but unfortunately, as of this morning it is not part of the agreement. The key negotiators are meeting TODAY and we need one last push to get key support for solar over the finish line. Can you take action to help?

Several key members of Congress are making their case to leadership to include 1603 in the tax legislation and they need grassroots support to strengthen their hand. Can you email your representative today? Extending this program will keep solar growing, creating more jobs and clean energy to power America.

One of the ironies of the ‘solar is expensive’ myth is that this country not only provides vastly more tax incentives for the fossil fuel industry than for renewables, but the majority of the incentives for fossils are permanent, while renewables have to re-up every couple of years or lose all momemtum. It’s a silly system that need structural reform, but until then, this program is critical to solar’s ability to grow and make its case in the face of a very unlevel playing field.

In any event, here’s a last-minute chance to get in good with Santa while he’s still making lists—please take a moment to contact your representatives in DC, help solar’s prospects, and get bumped from naughty to nice.

Onwards-

Adam + Team

The Vote Solar Initiative

300 Brannan Street, Suite 609

San Francisco, CA 94107

www.votesolar.org

http://twitter.com/votesolar

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Solar power shines on U.S. Manufacturing Council

In announcing his new appointments to the U.S. Manufacturing Council yesterday, Secretary of Commerce Gary Locke singled out the Council’s new leader, Bruce Sohn.

First Solar's Bruce Sohn

“With Bruce as chair,” said Locke, “we’re sending a message that President Obama and this Administration are committed to making renewable energy and efficiency technologies a cornerstone of a revitalized American manufacturing sector.”

Sohn is president of First Solar, the world’s largest manufacturer of thin-film solar PV, with headquarters in Tempe, Arizona. According to a Commerce Department spokesperson, Sohn is the first representative from the solar power industry to head the council, which advises the administration on competitiveness and other manufacturing issues facing U.S.-based companies.

Solar advocates, not surprisingly, enthusiastically endorsed the choice.

President and CEO of the Solar Energy Industries Association (SEIA), Rhone Resch, issued a statement saying that Sohn’s appointment “has told the world that the solar industry is becoming a backbone for our economy and offers a bright future for U.S. manufacturing.” (First Solar sits on SEIA’s board of directors.)

It’s not just the solar industry, however, that’s applauding the new leadership at the Manufacturing Council.

Jenny Powers, a spokesperson for that Natural Resources Defense Council (NRDC), said that by including Sohn the administration is acknowledging the fact that solar has a new relevancy in our energy future. “They [solar] are scaling up and playing with the big boys,” said Powers in a phone interview.

Sean Garren agrees. A clean energy advocate with the group Environment America, Garren said his organization is “looking forward to working with Mr. Sohn to reap all the manufacturing benefits we will see from the solar revolution in America.”

The U.S. has a lot of ground to make up.

A decade ago, 40 percent of all PV panels were made in the United States. That figure has dropped to less than 10 percent of the global supply today — a trend SEIA’s Resch thinks can be reversed in part by adopting smart manufacturing policies. One such example cited by Resch is the Advanced Energy Manufacturing Tax Credit program that provided $2.3 billion in credits to support U.S. manufacturers of clean energy equipment. The House has voted to refund the popular program; backers are still trying to get a similar bill through the Senate.

Other high tech manufacturers represented on the council include Freescale Semiconductor, Inc., GenMet, Ace Clearwater Enterprises, and Sacred Power Corporation, a Native American-owned business that deals in renewable and distributive energy.

Courtesy of First Solar

First Solar has its corporate headquarters in Arizona, where, in 2009, the legislature passed its own groundbreaking legislation, providing tax credits to manufacturers of renewable energy equipment (SB 1403). When a Chinese-owned maker of PV panels announced it had decided that Arizona would be the home of the first Chinese PV assembly plant in the U.S., the incentives found in SB1403 were given as a primary factor in the choice.

First Solar manufactures thin-film PV at plants in Germany (approximately 700 workers), Malaysia (2,000 workers) and Perrysburg, Ohio (1,000 workers). The company plans on opening a new plant in France in the second half of 2011. Manufacturing jobs have followed demand and until recently, most orders for solar panels have come from Asia and Europe. But as demand for PV in the U.S. has jumped, First Solar has increased the size and production of its Ohio plant.

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Six Renewable/Efficiency Energy Tax Credits You Need to Know

A host of new tax credits are now available thanks to the American Recovery and Reinvestment Act (ARRA). The only drawback is that there are so many ways to reduce your tax bill by investing in energy efficiency and renewables, that it may be hard to keep track of them all.

While visiting Seaway Manufacturing Corporation in Erie, Pennsylvania today (they make energy efficient windows), Secretary of Energy Steven Chu reminded his audience that “Investing in energy efficiency is one of the quickest and most cost-effective ways reduce the energy bills in your home. We want to make sure that families that made those investments are taking advantage of the Recovery Act tax credits, which can put up to $1,500 into their pockets.”

Here are six tax credits that are often overlooked:

1.Residential Energy Property Credit (Section 1121)

The new law increases the energy tax credit for homeowners who make energy efficient improvements to their existing homes. The new law increases the credit rate to 30 percent of the cost of all qualifying improvements and raises the maximum credit limit to $1,500 for improvements placed in service in 2009 and 2010.

The credit applies to improvements such as adding insulation, energy efficient exterior windows and energy-efficient heating and air conditioning systems.

A similar credit was available for 2007, but was not available in 2008. Homeowners should be aware that the standards in the new law are higher than the standards for the credit that was available in 2007 for products that qualify as “energy efficient” for purposes of this tax credit.

2. Residential Energy Efficient Property Credit (Section 1122)

This nonrefundable energy tax credit will help individual taxpayers pay for qualified residential alternative energy equipment, such as solar hot water heaters, geothermal heat pumps and wind turbines. The new law removes some of the previously imposed maximum amounts and allows for a credit equal to 30 percent of the cost of qualified property.

3. Plug-in Electric Drive Vehicle Credit (Section 1141)

The new law modifies the credit for qualified plug-in electric drive vehicles purchased after Dec. 31, 2009. To qualify, vehicles must be newly purchased, have four or more wheels, have a gross vehicle weight rating of less than 14,000 pounds, and draw propulsion using a battery with at least four kilowatt hours that can be recharged from an external source of electricity. The minimum amount of the credit for qualified plug-in electric drive vehicles is $2,500 and the credit tops out at $7,500, depending on the battery capacity. The full amount of the credit will be reduced with respect to a manufacturer’s vehicles after the manufacturer has sold at least 200,000 vehicles.

4. Plug-In Electric Vehicle Credit (Section 1142)

The new law also creates a special tax credit for two types of plug-in vehicles — certain low-speed electric vehicles and two- or three-wheeled vehicles. The amount of the credit is 10 percent of the cost of the vehicle, up to a maximum credit of $2,500 for purchases made after Feb. 17, 2009, and before Jan. 1, 2012. To qualify, a vehicle must be either a low speed vehicle propelled by an electric motor that draws electricity from a battery with a capacity of 4 kilowatt hours or more or be a two- or three-wheeled vehicle propelled by an electric motor that draws electricity from a battery with the capacity of 2.5 kilowatt hours. A taxpayer may not claim this credit if the plug-in electric drive vehicle credit is allowable.

5. Conversion Kits (Section 1143)

The new law also provided a tax credit for plug-in electric drive conversion kits. The credit is equal to 10 percent of the cost of converting a vehicle to a qualified plug-in electric drive motor vehicle and placed in service after Feb. 17, 2009. The maximum amount of the credit is $4,000. The credit does not apply to conversions made after Dec. 31, 2011. A taxpayer may claim this credit even if the taxpayer claimed a hybrid vehicle credit for the same vehicle in an earlier year.

6. Treatment of Alternative Motor Vehicle Credit as a Personal Credit Allowed Against AMT (Section 1144)

Starting in 2009, the new law allows the Alternative Motor Vehicle Credit, including the tax credit for purchasing hybrid vehicles, to be applied against the Alternative Minimum Tax. Prior to the new law, the Alternative Motor Vehicle Credit could not be used to offset the AMT. This means the credit could not be taken if a taxpayer owed AMT or was reduced for some taxpayers who did not owe AMT.

For more information, see the IRS FAQ page, here.