CALIFORNIA—The House Ways and Means Committee released a budget reconciliation bill today that would eliminate the most important policy supporting solar on homes. The Investment Tax Credit has been foundational for consumers adopting solar by covering 30% of the installation cost since 2005. The committee is proposing to keep the tax credit for businesses but eliminate it for residential customers who own the systems on their roofs.
CALSSA executive director Brad Heavner released the following statement on the proposal to eliminate the Investment Tax Credit:
Congress would be taking an axe to clean energy in America if they move forward with this proposal. Eliminating the residential tax credit in one fell swoop would cause layoffs and business closures.
Solar energy is an important business sector in our economy. Keeping the tax credit for large solar farms and eliminating it for rooftops would harm community-based businesses in favor of Wall Street interests.
Less solar in our communities would mean more costs for building long-distance power lines. This is a recipe for higher costs and less reliable power sources.
The solar tax credit is treated separately for commercial and residential taxpayers, though both are currently at the same percentage credit. Homeowners adopt solar energy in a variety of ways. Some pay for the system upfront. Others take out a loan, sign a long-term lease, or sign a “power purchase agreement” (PPA) with a solar provider. Only those residential customers using a PPA would qualify for the tax credit under the House bill.
The elimination of the tax credit for residential clean energy can be seen on page 221 of the House Budget Reconciliation Bill.