PHOTON International The Photovoltaic Magazine

Solar credit in energy bills, but effective date could hurt business

Just ahead of the debate on a major energy bill, the Democrat-controlled Senate Finance Committee unveiled a 15 percent residential solar tax credit in its version on Feb. 13. While the credit, valid for up to $2,000 on residential PV systems and solar thermal installations, had been requested in President George W. Bush's energy plan last May (see PI 6/2001, p. 18) and passed as part of the House of Representatives' Republican-backed energy bill last September, there is one important difference. The House version was amended to cover PV systems installed after Dec. 31, 2001; the Senate bill would not take effect until the end of 2002.

This discrepancy has the Solar Energy Industries Association (SEIA) scrurrying to get enough Senate support to make the credit retroactive for all of 2002. Were the Senate bill to pass without that change, the PV industry would undoubtedly see customers holding off on PV until the start of 2003. »We are very concerned that people will delay making purchases unless there is protection on the date of enactment,« says Glenn Hamer, SEIA's executive director. The US Treasury estimates the amount of federal tax revenue reduction in 2002 at $3 million (see table). »We're not talking about a sum of money that will break the bank,« says Hamer, who adds that any delays would also hurt state programs that leverage the federal tax credits.

The question now is not what the energy bill will look like, but whether it will go anywhere. The House version, House Bill 4, weighted with tax credits, supports Bush's pro-fossil-fuel policies, especially drilling in the pristine Arctic National Wildlife Refuge for oil and natural gas. The more renewable energy-friendly Senate version, Senate Bill 1766, includes a call for a national renewable portfolio standard of 10 percent by 2020 and the development of guidelines for a wind and solar energy pilot program on federal lands. With so many »holy and unholy alliances« in Congress, Hamer says it is impossible to predict the outcome.

But even if the energy bill stalls in March conference hearings between the Senate and House – a strong possibility – Hamer remains optimistic. Given Bush's backing for the credit, as well as the strong bipartisan support in Congress, he thinks the proposal might be factored out for separate passage, probably by the end of the year. »In that case,« says Hamer, »I would not be surprised to see a blizzard of activity in September.« wph