Experts Predict Renewable Investment Boom as Congress Renews Tax Credits

The U.S. solar and wind power industries will mark the holidays with heightened spirits after receiving multiyear extensions of their coveted renewable energy tax credits from a divided Congress.

On Friday, the House and Senate agreed by significant margins to grant extensions to the 30 percent investment tax credit (ITC) for solar energy and the 2.3-cent-per-kilowatt-hour production tax credit (PTC) for wind power.

Other technologies -- including geothermal, marine energy and small hydropower -- received one-year extensions to their 30 percent ITC under the joint spending and tax measures passed Friday and expected to be signed by President Obama this week.

The largest beneficiaries of Congress' year-end gifting were the solar and wind sectors, both of which will see their tax credits extended to at least the end of the decade.

"This is one of the most significant stimulus policies for the renewable sector I've seen in the past 10 years," said Alex Klein, senior director of renewable power research at the consulting firm IHS Inc.

The PTC for wind energy will remain at full strength through 2016, followed by incremental reductions in value for 2017, 2018 and 2019 before expiring in January 2020.  The ITC for solar will continue at 30 percent levels for both commercial and residential systems through 2018, then taper off in yearly increments to settle at 10 percent in 2022.

"With predictable policies now in place, we will continue advancing wind turbine technology, driving down our costs and passing the savings on to American families and businesses in all corners of the country," Tom Kiernan, CEO of the American Wind Energy Association, said in a statement.

On a Friday morning conference call with reporters before the Senate vote on the tax extenders package, Rhone Resch, president and CEO of the Solar Energy Industries Association, said the industry group was "pretty excited about what's happening here, but we're not across the finish line yet."

The finish line came just a few hours later, as the Senate voted 65-33 in favor of a $1.15 trillion omnibus spending bill and companion $629 billion tax bill that should keep the government running through September.

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