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Solar Moves to Defend Against ITC Repeal

The American solar industry's months-long push to extend then revive the popular 1603 Treasury grant has ceded ground to a parallel strategy to keep Congress from repealing the Investment Tax Credit.

The fundamental change became apparent last week on Capitol Hill when two competing amendments to the same bill showed that at the same time the industry maintains its offensive approach, it has been forced to play a perhaps unexpected game of defense as well.

Both bills ultimately failed, but it served to show how divisive energy policy has become among legislators in Washington. Stabenow’s amendment would have boosted renewable energy production through a host of tax extensions that would have benefited solar, wind, bio-energy and other forms of energy. Legislators split evenly mostly along party lines, and fell far short of the 60 votes needed.

It was the amendment by Sen. Jim DeMint, R-S.C., that could force a shift in strategy. DeMint echoed the growing call for Congress to strip subsidies out of American energy with a bill that would have repealed the Production Tax Credit that has fueled the wind industry and the Investment Tax Credit, that’s still considered the backbone of the solar industry.

“We have more of a multi-tiered approach,” said Rhone Resch, President and CEO of Solar Energy Industries Association during a press conference Monday at PV America West in San Jose, Calif.. “For us, 1603 is truly the most effective policy. In our opinion, it’s absolutely critical for small businesses.

“What is now becoming clear as the shadow of fundamental tax reform comes at us, we have to make the case for maintaining the ITC fact-based and extremely clear to Congress about why this should be left in place."

In 2005, the ITC was passed as a two-year credit. Currently, it’s set to expire at the end of 2016, which gives the industry some sense of stability, though not as much as it’d like. Repealing that credit could send projects off the cliff.

“We at least have to have policy certainty in place to 2016, then have a policy that works after that,” said Resch. “No doubt, we have to protect the ITC now. It’s going to take a lot more of our resources.”

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