America's New Year's gift will be a $750 billion stimulus bill prepped and passed this month in Washington. Congress and the Obama team have made it clear that green energy jobs and infrastructure will be key elements of this package.
Building out solar jobs and installations should be a key ingredient of this platform. In terms of "shovel-ready" projects, solar is able to deliver jobs and clean energy quickly at a great return on investment.
There are two things holding back solar right now which can be easily fixed in the stimulus bill:
1. The disappearance of tax equity investors --
Since all the traditional investors in solar projects who did so to gain the tax credits to shelter profits now have no profits, they are out of the game. This includes Morgan Stanley, Wells Fargo and others.
To fix this, let's make solar tax credits refundable for at least two years.
2. 30% is not enough in a downturn
The Congress renewed the solar tax credit at 30% this past October. While in normal economic times that might be fine, it is not cutting it in this downturn.
States have pulled back their subsidies or have delayed new ones. Residential and small commercial customers who do not seek financing in many cases would install solar with a greater incentive.
We recommend increasing the federal solar tax incentive to 50% for two years -- 2009 and 2010 -- that would catalyze a wave of solar installation in the US. That is great timing since the cost of solar panels has plummeted.
The cost of increasing the solar tax credit for 2 years to 50% is only $353 million -- a small amount in a $750+ billion bill.
These two moves will also create the jobs for all the retrained green collar workers to fill. Congress intends on funding the Green Jobs Act at $500 million in the stimulus. Where will all these workers go to work? We must create demand for the jobs and solar is one the fastest ways to scale up green energy.
Let your member of Congress know how you feel about solar -- 2 quick fixes can make a world of difference.