The sun will begin to set next year on a tax credit for solar power installations, barring action by Congress.
The solar Investment Tax Credit, currently 30%, is scheduled to fall to 26% next year and 22% in 2021 before expiring altogether for residential systems, although a 10% credit would continue to apply to commercial and utility-scale projects.
The Solar Energy Industries Association is supporting legislation that would extend the 30% credit for five years. Dan Whitten, vice president of public affairs for SEIA, said the credit was first implemented in 2005 and since has been extended twice, most recently in 2015.
"Our point of view is that the (solar) investment tax credit is the single-most successful clean energy policy in history," he said.
He said it has accounted for $140 billion in private investment, almost 200,000 jobs and substantial reduction in carbon emissions.
The Renewable Energy Extension Act has bipartisan support in the House of Representatives, including from 14 Republican House members, Whitten said. He said the Senate poses more of a challenge in that Republican senators might not want to support the measure if they face tough primary fights, though they might take a different position on it in a general election.
"The politics are challenging, no question," he said.
One hope is that the tax credit extension could be included in an end-of-year omnibus appropriations bill, Whitten said.
He said there are some 7,000 solar jobs in Colorado now.
"There's an opportunity for many more," he said, citing the state's growth, solar potential and policy interests.
His association estimates that in Colorado extending the credit would create another 2,300 jobs and generate another $2 billion in private investment.
The looming phase-out of the tax credit comes as the solar industry also is coping with tariffs on solar panel imports under the Trump administration, starting at 30% last year and reducing over time.
Whitten said the costs of solar have continued to go down, but with the tariffs, "projects didn't get built because solar wasn't as cheap as it could have been."
Lou Villaire, with Atlasta Solar Center in Grand Junction, said that from his perspective the tariffs "haven't helped but they haven't hurt." He thinks they've had a bigger impact on utility-scale solar farms. He said tariffs on aluminum also have affected the solar industry because aluminum is used in installations.
He said his own view, not necessarily speaking as a representative of his company, is that the industry can't necessarily rely on tax credits indefinitely. Villaire said the drop to a 26% credit next year won't be a big change, and he also pointed to the commercial credit that will remain even after the residential one is set to expire.
"It isn't as if (the phase-out) is something that we didn't expect, and certainly the tax credits have been around a good long while," he said.
At the same time, he said the oil and gas industry has gotten tax benefits that date back a century. "We kind of always have to fight for them from year to year. I'm not crying about that, I'm just trying to put it into perspective," Villaire said.