During the late 1970's  the Carter administration began the first full fledged governmental effort to support solar powered energy by extending tax credits to homeowners who installed solar systems in their home. The solar industry started to take off then as more people began to explore and use this new technology.  During the Reagan years, however, the tax credits were abolished and the solar industry went bust. Today there are only some limited tax credits for homes ( $2000 per system for residential homes) and commercial properties that are set to expire 12/31/07.  

But now Congress is attempting to re-institute robust tax credits and rebuild the market for solar energy that existed 30 years ago.  The Securing America's Energy Independence Act of 2007 (H.R. 550 and S. 590) greatly increases the available federal tax credits established in 2005 for homeowners who choose solar energy. Originally capped in 2005 at $2,000 per solar energy system, the new bills would remove the cap, offering $1,500 per half-kilowatt of energy a system can produce. (A single-family household installing a photovoltaic system of around 5 kW would then be eligible for a generous credit of $15,000. WOW!) What's more, the bills extend the credits' deadline to the end of 2016, To spur development in the industry, experts say that long-term credits are key, and that short-term credits like those passed in 2005 create a "boom and bust" effect within industries, triggering demand for only a short time, before the bottom falls out.

Key Details of the Bill

• Extends the Investment Tax Credit

(ITC) for all residential and commercial solar and fuel cell equipment for 8 additional years (with the commercial solar ITC reverting back to 10% in 2017).

• Modifies the residential and commercial tax credit for photovoltaics to $1,500 per half kilowatt,

• Removes the 30% cap for commercial photovoltaic installations and the $2,000 cap on residential photovoltaic installations.

• Provides 3-year accelerated depreciation for commercial solar and fuel cell projects.

The 8 year extension is critical because it provides for more lead time for development of larger solar systems. Similar to other emerging energy technologies such as clean coal and nuclear, large-scale concentrating solar power (CSP) plants and new solar and fuel cell manufacturing plants require long lead times that far exceed the 2-year time period remaining from the 2005 energy bill and 2006 extenders act. Development of a CSP plant can take 3-6 years, while new PV and fuel cell manufacturing facilities require 3-5 years to be completed.

The solar industry is starting to gear up and attempt to generate power at a price equivalent to fossil fuel prices by the year 2015.   Right now generating electricity from photovoltaics costs between 18 and 23 cents a kilowatt hour. It is projected to go down to 11 to 18 cents by 2010 and then to 5 to 10 cents by 2015, according to the National Renewable Energy Labs. By contrast, electricity in the U.S. costs between 5 and 18 cents per kilowatt hour, according to the Energy Information Administration.

I think if these bills pass many more home buyers will decide to install solar power systems in their homes to provide most if not all of their energy needs. I know that there will be a large increase of these systems in new homes in the Asheville, North Carolina market since we already have a lot of solar power system installers in our area. I also believe that more existing homeowners will also think about the benefits of retrofitting their homes with solar systems as well given the potential size of the tax credits.   

This is a bill that many eco real estate agents should find easy to support. If you feel so disposed please contact your local House Representative and Senator to indicate your support or these bills.