SEIA Legislative Update 8/4/2007:
We are pleased to report that the solar industry earned a major victory today. The House passed both H.R. 2776, the energy tax package, and H.R. 3221, the overall energy bill. We succeeded in seeing passage of our industry’s top priority, extension and improvement of the solar investment tax credits, in H.R. 2776. The solar investment tax credit provisions in H.R. 2776 are as follows:

• Provides an eight-year extension of the existing 30 percent Investment Tax Credit for businesses under Section 48 of the tax code
• Provides the ability for corporate and personal filers to claim the Investment Tax Credit against the Alternative Minimum Tax (AMT)
• Removes the prohibition barring utilities from using the section 48 Investment Tax Credit
• Provides no extension of the existing 30 percent Investment Tax Credit for homeowners under Section 25 of the tax code, but eliminates the existing $2,000 maximum dollar limitation
• As well, the tax title provides up to $2.4 billion in bonding authority for the issuance of Clean Renewable Energy Bonds.

Overall Energy Bill Passes with Several Key Solar Provisions

Also today, the House passed H.R. 3221, incorporating energy legislation from several non-tax committees. A full listing of the provisions related to solar can be found below.

Most notably, the House adopted an amendment by Congressman Tom Udall (D-NM) to create a national Renewable Energy Standard. The RES would require utilities to provide 15 percent of their power from renewable sources by 2020, allowing 4 percent of the requirement to be satisfied with electricity efficiency measures. The RES does not pre-empt state RPS requirements or statutes.

We note that eligible solar technologies include both solar electric and solar water heating technologies. As well, for distributed generation (including distributed solar), a 3x credit multiplier would be issued for each kilowatt hour generated.

Here is the complete listing of solar provisions that can be found in H.R. 3221. For more information, go to www.seia.org.

Solar Provisions in H.R. 3221, the New Direction for Energy Independence, National Security, and Consumer Protection Act

• Title III - Small Business Committee Sec. 3005: Provides grants, subject to appropriation, and authorizes technical assistance to small businesses to assist them in evaluating the suitability of using solar energy resources.
• Title IV – Science and Technology Committee Sec. 4301- 4308: The Solar Energy Research and Advancement Act of 2007, provides funds, subject to appropriation, to support the research, development, and commercial application of solar energy technologies. Special emphasis is placed on concentrating solar power thermal storage research, solar lighting and cooling and advanced photovoltaic technology development.
• Title VII – Natural Resources Committee
  
  • Sec. 7302: Directs the Bureau of Reclamation to inventory lands under its jurisdiction for suitability for solar energy development projects.
  • Sec. 7304: Establishes a Strategic Solar Reserve Program that seeks to identify lands under the Bureau of Land Management’s jurisdiction that can accommodate up to 25 GW of solar energy development. Provides favorable terms and conditions for permitting, leasing and site identification.
• Title IX – Energy and Commerce Committee
  • Sec. 9072 - 9075: Authorizes the Department of Energy, subject to appropriation, to assist state, county, local government, schools, universities, airports and other qualifying entities, to provide technical assistance to increase the deployment of solar energy systems.
  • Sec. 9086: Authorizes 25 year federal power purchase agreements for solar energy (current maximum duration is 10 years).
  • Sec. 9321- 9328: Authorizes heightened cooperation between the U.S. and Israel on innovative energy technologies, including solar.

Adopted Amendments

Renewable Electricity Standard (RES) -- Requires electric suppliers, other than governmental entities and rural electric cooperatives, to provide 15 percent of their electricity using renewable energy resources by the year 2020. It would allow 4 percent of the requirement to be satisfied with electricity efficiency measures. For distributed generation (electric energy generated by a renewable energy resource at an on-site eligible facility, used to offset part or all of the customer's requirements for electric energy), including distributed solar, the Secretary of Energy shall issue three renewable energy credits to such customer for each kilowatt hour generated.

Solar Energy Industries Research and Promotion Board -- Creates a Solar Energy Industries Research and Promotion Board to increase consumer awareness nationwide of solar energy options and appropriate certifications. The solar program would be funded entirely by a small portion of industry revenues. No appropriations are authorized.

Outlook

Today's vote is a major step forward for the solar industry. It was vital that the House energy bill included a tax title, allowing the possibility for the Senate and House to include a tax title in the final version of the bill. Over the past week, SEIA worked to rally support for the tax title among undecided Members of Congress and sent out four action alerts, including one to the larger membership of Solar Nation, resulting in hundreds of phone calls to Members of Congress. We thank all of those SEIA members who called their Member in support of the tax title.

When Congress returns from the August recess, we anticipate that the House and the Senate will appoint conferees and start combining their respective versions of the energy bill. We expect that leadership in both the House and Senate will push to include a tax title in the compromise version. Regarding the solar tax credits, SEIA will advocate for a “best combination” policy that combines the improved incentive structure in the House version with the long-term extension for both commercial and residential solar that was contained in the Senate version.

We thank you for your involvement and will continue to keep all SEIA members informed as developments in Congress proceed. If you have any questions about the current outlook, please visit our ITC Resource Page at www.seia.org itc or contact This e-mail address is being protected from spam bots, you need JavaScript enabled to view it .