| SAN FRANCISCO, Sept 28
SAN FRANCISCO, Sept 28 A stalemate in Washington
next year over tax reform could help solar developers by
preserving the 30 percent investment tax credit for solar
projects until it expires at the end of 2016.
Regardless of who wins the Nov. 6 U.S. presidential
election, Congress is expected to target tax loopholes and
government subsidies as part of an effort to rein in federal
spending and cut the deficit.
But an agreement between Democrats and Republicans is not
expected to come easily, and an impasse could keep the ax away
form the tax credit.
"It's one of those unusual situations where the gridlock
that prevails around Congress could actually work to our
benefit," Paul Detering, chief executive of San Francisco-based
solar project developer Tioga Energy, told the Renewable Energy
Finance Forum conference in San Francisco on Thursday.
The tax credit allows buyers of residential and commercial
solar systems to reduce their tax bills by 30 percent of the
cost of a new solar energy system. Because of the hefty upfront
cost of buying a system, the U.S. solar industry relies heavily
on this incentive, and others at the state level.
But while Congressional deadlock could help preserve the tax
credit, breaching of the "fiscal cliff" on Jan. 1 would result
in automatic cuts to some programs. If this happens, government
payouts to solar projects assisted by a U.S. cash grant program
would automatically be cut almost 8 percent, dealing a blow to
projects expected to come online next year.
Any cut to the cash grant program "would be very disruptive
to the industry," said Arno Harris, CEO of solar project
developer Recurrent Energy, a unit of Japan's Sharp Corp
Nat Kreamer, CEO of Clean Power Finance, a startup that
helps solar installers access financing, said that even an
in-depth discussion on Capitol Hill about ending the tax credit
would hurt development of solar projects.
"The most important thing is consistent tax incentive
policy, and right now the solar industry has that through 2016,"
Kreamer said. "Comprehensive tax reform might open the book on
everything, which would create uncertainty in the solar
investment market. Uncertainty leads to slowdowns in the
industry and that would be very unfortunate," he said.
Republican lawmakers branded the Obama administration's
green incentives a waste of public money after Solyndra, the
California-based solar panel manufacturer that received a $535
million government loan guarantee, filed for bankruptcy in
But many in the industry believe any threat to the tax
credit is remote.
"Despite a year-long, concerted effort to attack solar, the
American people haven't been fooled," said Recurrent Energy's