Residential Solar Tax Credits - Importance of HR6049

The next few months will be a critical time for those of you seriously interested in installing solar electric power at your home.  The $2,000 Federal energy-efficient property tax credit (residential solar property) is due to expire at the end of the year and while the House has passed HR6049 which will provide for its extension to 2014, it has yet to make it through the Senate.

What are the implications of the bill not passing?  On the residential side, the $2,000 existing tax credit (and $4,000 proposed tax credit) makes a meaningful difference to the economics of an individual residential solar deal and its loss will surely reduce demand and installation of solar electric energy systems.  This in turn will put pressure on an already fragile ecosystem of residential installers as well as some regional/national players.   

Failure to pass HR6049 will also cause significant disruption in the commercial solar development markets.  Any project not put in service before December 2008 will currently not be eligible for the credit; so engineering, procurement and construction activities will start slowing given the 5-6 month average project timeline.  The bill includes a provision to extend the 30% investment tax credit for a further 8 years through 2014.  The uncertain outlook for commercial business will mean a loss of jobs, investment and confidence and threaten the ability of companies to raise both venture capital and specific project equity capital going forward. 

What can you do?  If, like us, you feel strongly about this, we suggest you contact your local elected officials or else go to the Vote Solar website.  They have a simple and elegant tool for registering your support for the bill.  In addition, find an installer today and figure out if solar will work for you; capture the benefit while it still exists.