Wind, Solar, and the Renewable Energy Tax Credit
ACHR News, August 31, 2015. Image credit: Tax Credits
An existing federal tax credit for residential renewable energy systems, specifically solar, wind, and geothermal, is set to expire at the end of 2016. The NEWS has covered what this means for the burgeoning geothermal market extensively, but the lesser heralded solar and wind markets will also be affected. The tax credit has undoubtedly been a boon for both the solar and wind industries, and while some have presented benefits to letting the credits expire and go away, many more are hoping they’ll be extended and renewed.
EXPANSION OF WIND AND SOLAR
According to the 2014 Wind Technologies Market Report, per Energy.gov, “the total installed wind power capacity in the U.S. grew at a rate of 8 percent in 2014 and now stands at nearly 66 gigawatts [GW], which ranks second in the world and meets 4.9 percent of end-use electricity demand in an average year. The U.S. was the global leader in total wind energy production in 2014.”
The solar industry is in the midst of similar growth, as the Solar Energy Industries Association (SEIA) reports, “the U.S. solar industry achieved another record year in 2014, growing by 34 percent over 2013 to install nearly 7,000 megawatts [MW] of solar electric capacity. Within the photovoltaic [PV] sector, more than 6,200 MW of capacity was installed, led by the residential and utility segments, which grew by 51 percent and 38 percent, respectively.”
While the credit’s future lies solely in Congress’s hands, it’s nearly impossible to expect any significant decision to emerge from a highly partisan Capitol Hill — especially with a presidential election on the horizon. So, perhaps a contractor’s best route is to plan on a future without the incentives, and, if they’re renewed, consider it an added bonus.