Is the Solar Boom Coming to an End?

Solar efficiency has gone up and production prices have gone down combined with the fact that credits for solar will soon be drastically reduced means the payback time for most residential solar investment is four or five years.

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(TNS) — We’re staring down the barrel of a solar boom-and-bust ... that almost nobody is talking about.

Generous federal credits for residential solar panels are about to expire at the end of next year, guaranteeing that 2016 will be a year of false hope, with people rushing to jam south-facing photovoltaics on roofs nationwide.

And then on Dec. 31, 2016, the federal tax credit will drop from 30 percent down to 10 percent for businesses and zero for homeowners. In the parlance of “Game of Thrones” fans, winter is coming — for solar.

We’ve heard a lot of lofty talk about energy on the presidential campaign trail, but very few details that would indicate an extension of the credit could be afoot.

Democratic presidential candidate Hillary Clinton over the weekend released an overview of a seemingly far-fledged pledge to boost solar power seven-fold by 2020.

But Clinton’s plan was vague. Incredibly, it lacked any reference to America’s most important solar policy, the aforementioned Solar Investment Tax Credit. This credit has driven a whopping 1,600 percent growth in residential solar installations since 2007. And it’s the growth engine that made solar energy second only to natural gas in terms of all new electricity-generating capacity in the U.S. last year.

Without it, the Solar Energy Industries Association predicts new installations will decline 57 percent in 2017, triggering an investor freakout.

The long-term uncertainty of the tax credit has deeper implications, potentially affecting investment in new construction.

“We will generate enough renewable energy to power every home in America within 10 years of my taking office,” Clinton said in a statement. “As President, I will build on the work of this Administration and make America a clean energy superpower and a global leader in the fight against climate change. That’s a promise.”

No one has asked Clinton how her plan is feasible without renewing the investment tax credit.

Rival candidate Sen. Bernie Sanders has focused his solar policy on expanding renewable energy access to low-income citizens. On the Republican side, Donald Trump has blasted solar technology as a bad investment. Fellow Republican presidential hopeful Jeb Bush has called for all energy tax credits to be phased out — including, to his credit, fossil fuels.

The reality is that solar efficiency has gone up and production prices have gone down. Combine that with state and federal credits, and the payback time for most residential solar investment is four or five years.

Republicans would be smart to get on board with this common-sense tax credit and Congress would be even smarter to extend it — taking it off the table as a possible presidential campaign topic.

©2015 the Boston Herald, Distributed by Tribune Content Agency, LLC.

 


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