SCHUMER CALLS FOR CHANGES TO FEDERAL SOLAR TAX CREDIT TO KEEP SOLAR PANEL PROJECTS ON TRACK AND HELP SOLARCITY CREATE MORE LOCAL JOBS; SENATOR SAYS TAX CREDITS SHOULD BE AVAILABLE WHEN PROJECTS BEGIN, NOT UPON COMPLETION
Tax Incentive Allows Savings on Investment in Solar Panels, However, They Only Receive These Benefits Upon Completion Of The Project; Uncertainty About Solar Tax Credit’s Future Could Delay Projects & Installations, Or Keep Projects From Happening At All, Hampering SolarCity’s Growth
Schumer Says Current Restrictions And Regulations Prevent Businesses, Residents And The Solar Power Industry From Reaping Full Financial Benefits, Which Would Expand & Create Even More Middle-Class Jobs
Schumer: Changes To Solar Tax Credit Will Power Up New American Jobs At SolarCity And Beyond
U.S. Senator Charles E. Schumer today visited SolarCity to officially launch his push for an extension and change to the existing federal solar investment tax credit (ITC) to support jobs at solar companies, like SolarCity in Buffalo, NY. Schumer specifically called for changes to the current solar ITC eligibility rules that do not allow businesses to gain from the tax credit until the solar panels they install are “placed in service.” Schumer said that current rules create uncertainty for customers because they are not guaranteed a tax credit until a project is completed. This therefore creates a disincentive to commence projects. In contrast, businesses have taken advantage of a major tax credit for wind energy soon after they begin construction of a wind project. Schumer also called for an extension of the solar investment tax credit. Currently the solar investment tax credit is scheduled to phase down from a 30 percent credit to a 10 percent credit after 2017.
“We can power up thousands of jobs in Western New York by extending and modifying the solar investment tax credit. The 30 percent solar investment tax credit has been nothing short of a bright success, which is why we need to extend the full credit past 2016. We should also modify the credit so more businesses can utilize this incentive, to get even more projects underway and create more good-paying local jobs at companies like SolarCity. SolarCity has the potential to put Buffalo on the map as the largest solar panel factory in the world – and allowing its future customers to reap the full benefits of this credit when they break ground on a solar project will go a long way toward ensuring this company's future,” said Schumer.
Schumer is proposing that the solar investment tax credit follow the same rule as the wind tax credit, so that businesses can directly benefit – and homeowners can indirectly benefit through savings passed along from the developer – from the 30 percent tax credit the year solar projects begin. The rule change would provide more certainty for companies making long-term investments in solar energy projects and positively impact sales for companies like SolarCity, which is actively building what will be the largest solar panel factory in the world. This facility will be located in South Buffalo and is poised to create as many as 3,000 jobs.
Despite solar energy’s rise in popularity, it still only accounts for less than 1 percent of all U.S. electricity production. Schumer said that while many businesses and residential developers are beginning to install solar panels to save on energy costs and operate in an environmentally conscious manner, there needs to be a concentrated effort to help facilitate the increased use of solar technology. Schumer said increasing the use of solar technology would help the U.S. meet the Obama administration’s goal of getting 28 percent of power from renewable energy sources, like wind and solar, by 2030. In order to meet this goal, the federal government previously expanded the solar investment tax credit, which currently allows companies to receive a 30 percent tax credit on their investment in an eligible property.
The solar investment tax credit allows businesses investing in solar panels on commercial buildings and residential homes to claim this 30 percent credit upon the completion of a solar project. However, Schumer said, the fact that this credit can only be claimed at the completion of a project is a hindrance to both businesses seeking solar projects and to homeowners, who would benefit from decreased construction and energy costs. Installing solar panels is often a multi-year project, especially for large utility-scale projects that require extensive permitting. Schumer said that utility-scale solar projects, for which developers must navigate time-consuming financing and permitting issues can take three to five years to complete. Making the credit available in the first year of construction would provide more certainty for companies making long-term investments in solar energy projects and positively impact sales for companies like SolarCity. Improving the financing of large scale solar projects could help the solar market expand and could allow SolarCity to create even more middle-class jobs in the Western New York region.
Schumer said that allowing companies to take advantage of this credit after 2016 is critical, as the solar investment tax credit is about to phase down. After 2016, unless the solar investment tax credit is extended by Congress, the credit will drop to 10 percent. The extension of the current credit is especially important for companies like SolarCity. Schumer said, considering the factory will not be fully up and running before the tax credits impending phases-down. Schumer said without this extension, many solar panel installation projects could be at risk of delays or cancellation due to the impending decrease in the solar investment tax credit value. Schumer said companies should be able to rely on certainty in the tax code in order to appropriately plan their financial future.
Schumer was joined by SolarCity Executives, including Dan Harvey, Director of People Empowerment; Shaun Chapman, Vice President, East Coast Policy; and Scott Hennessey, Director of Federal Policy and Regulatory Counsel.
“We’re proud to welcome Senator Schumer, a great champion of the solar industry, to our Buffalo facility. We’re glad to have such a great leader to work with us to create jobs and make energy costs more affordable for consumers in New York and the rest of the country,” said Scott Hennessey, Director of Federal Policy, and Regulatory Counsel for SolarCity. “This change to the Solar Tax Credit will enable more businesses and residents across the country to invest in solar, putting people to work, right here in Western New York.”
The solar investment tax credit has played a critical role in helping jumpstart solar energy projects. With stability provided by the solar investment tax credit, solar costs have dropped rapidly and continuously – the average cost of solar has dropped by more than 73 percent since solar investment tax credit was expanded in 2006. Residential costs have dropped by 45% since 2010, while utility-scale costs have dropped more significantly, with recent contracts at prices below $0.05/kWh. The solar industry now employs 174,000 workers in 50 states, including 3,300 in New York, compared to 15,000 workers in 2005.
In 2014, SolarCity acquired Silevo, a company that produced high-tech Triex panels for solar energy production. At the time of SolarCity’s acquisition, Silevo had an agreement in place with New York State officials to build a solar panel manufacturing facility in Buffalo. SolarCity promised to honor Silevo’s commitment to keep the facility in Buffalo. Once completed, the facility will include a 1 million square foot manufacturing factory on a site located at Riverbend in Buffalo. Solarcity anticipates the facility will be completed in the third quarter of 2016 and will be fully operational in 2017. The project will create nearly 3,000 jobs, including 1,460 high-tech jobs at the SolarCity facility and an additional 1,440 supply-chain jobs. Jobs are expected to pay roughly $45,000 for manufacturing jobs, and up to more than $100,000 for higher-skilled engineering jobs.
Previous Article Next Article