Congress recently extended renewable energy usage tax credits by another five years. According to analysis by Bloomberg New Energy Finance, this extension allows for a projected $73 billion in new solar and wind energy investments.
Solar and wind energy live on
The decision came after long speculation regarding how the renewable energy market, specifically solar, would look in the U.S. Clean Technica reported using information from Green Tech Media that losing the 30 percent solar energy tax credit could kill the photovoltaic market outside major U.S. cities. The tax credit was initially extended in 2008 and set to expire by 2016. The renewal extends the 30 percent solar energy tax credit to 2019, after which it will taper to 10 percent by 2022.
The wind energy tax credit expired in 2014, but was renewed along with the PV tax credit and will now expire in 2019. Installations that occurred during 2015 will retroactively be granted credits. According to Bloomberg, wind energy incentives experienced a volley of changes as lawmakers went back and forth on extension periods and deadlines. This five-year grant gives investors confidence and the wind energy market a clear road to growth.
U.S. continues its energy promise
Global and domestic energy companies are overjoyed at the policy adjustment. Tri Global Energy called it a game changer and instituted plans to aggressively expand wind and solar divisions. SunEdison President and CEO Ahmad R. Chatila applauded Congress and called the renewal a great step forward for America, noting job creation as a major result of this congressional agreement.
Wind and solar installation prices have dropped 90 percent since the tax credit was initiated. According to Bloomberg New Energy Finance, by the time the extension expires, solar and wind will be the cheapest sources of new electricity. Before the extension ends, the U.S. is expected to gain 20 gigawatts of solar capacity and 19 gigawatts of wind power capacity. Bloomberg projects this will be enough to power 8 million U.S. homes.
These major changes to the country's energy sourcing arrive on the heels of the Paris climate change talks. Unfortunately, not all major governments are taking such huge strides this soon. The Guardian reported that the United Kingdom cut 65 percent of its subsidies to homeowners installing rooftop solar panels. The United Kingdom's Department of Energy and Climate Change fears this will result in a major loss of green industry jobs. Of the industry's 32,000 jobs, the DECC predicts 18,700 will be eliminated.