Tax Incentive Allows Businesses, Residents, and Municipalities to Install Solar Panels; However, They Only Receive These Benefits Upon Completion of the Project; With New Installations Contemplated in Rose, Williamson, City of Rochester, Henrietta, and Parma, Uncertainty About Solar Tax Credit’s Future Could Hamper Growth of Burgeoning Local Solar Companies
Schumer Says Current Restrictions and Regulations Prevent Residents, Businesses, and The Solar Power Industry From Reaping The Full Financial Benefits, Which Would Expand & Create New Middle-Class Jobs
Schumer: Changes to Solar Tax Credit Will Power Up New American Jobs Right Here in Wayne County and the Rochester-Finger Lakes Region
New York – August 20, 2015 – (RealEstateRama) — U.S. Senator Charles E. Schumer today visited the seven acre “William Sun” Solar Field, the largest solar installation in the Greater Rochester area, and stood with owners of local solar companies and elected officials to officially launch his push for an extension and change to the existing federal solar investment tax credit (ITC) to support jobs at solar companies like Wayne County-based Sustainable Energy Development (SED) and O’Connell Electric-owned Rochester Solar Technologies, along with Invictus Electrical in Victor, NY, Renewable Rochester in Webster, NY and others in the Finger Lakes region.
Schumer called for an extension of the vital solar investment tax credit. Currently the solar investment tax credit is scheduled to phase down from a 30 percent credit to a 10 percent credit after 2016. Secondly, Schumer called for changes to the current solar investment tax credit’s eligibility rules that do not allow business and developers who invest in solar systems to gain from the tax credit until the solar panels they install are “placed in service.” Schumer said that current rules create uncertainty for customers because they are not guaranteed a tax credit until a project is completed. In contrast, businesses have taken advantage of a major tax credit for wind energy soon after they begin construction of a wind project.
“We can power up jobs in the Rochester- Finger Lakes Region by extending and modifying the solar investment tax credit. The success of the WilliamSun solar installation is an example of the tax credit’s win-win-win impact. That’s why I am first pushing to allow customers to reap the full benefits of this credit when they break ground on a solar project, rather than when they complete construction and why I’m pushing to extend the credit beyond 2016. WilliamSun was built by SED a local Wayne county company that has grown 300 percent in three years, it cut the Town of Williamson’s utility bills by 27,000 a year for local taxpayers, and it’s success is helping SED hire up to 25 additional construction workers this fall. The 30 percent solar investment tax credit has been nothing short of a bright success. And yet while the credit is on the books through the end of 2016, the job-creating benefits it creates are in jeopardy,” said Schumer.
Schumer is proposing that the solar investment tax credit follow the same rule as wind tax credit, so that businesses and developers can benefit from the 30 percent tax credit the year solar projects begin construction. The extension and rule change would provide more certainty for companies making long-term investments in solar energy projects, which would positively impact sales for companies like Sustainable Energy Developments (SED), O’Connell Electric-owned Rochester Solar Technologies, Invictus Electrical in Victor, NY, Renewable Rochester in Webster, NY and others throughout the region.
Schumer said that while many businesses and residential developers are beginning to install solar panels to save on energy costs and operate in an environmentally conscious manner, there needs to be a concentrated effort to help facilitate the increased use of solar technology. Schumer said increasing the use of solar technology would help the U.S. meet the Obama administration’s goal of getting 28 percent of power from renewable energy sources, like wind and solar, by 2030. In order to meet this goal, the federal government previously expanded the solar investment tax credit, which currently allows companies, to receive a 30 percent tax credit on their investment in an eligible property. Municipalities can also benefit from the 30 percent tax credit by contracting with a company that owns a solar energy facility. For example, the Town of Williamson received savings because it was passed along to the town by Kenyon Energy, the company that operates the WilliamSUN Solar Array. Additionally, homeowners can indirectly benefit through savings passed along from developers of large scale residential solar projects.
The solar investment tax credit allows businesses investing in solar panels on large scale commercial buildings and residential homes to claim this 30 percent credit upon the completion of a solar project. However, Schumer said, the fact that this credit can only be claimed at the completion of a project is a hindrance to both businesses seeking solar projects and to homeowners, who would benefit from decreased energy costs. However, installing solar panels is often a multi-year project, especially for large projects that require extensive permitting. Schumer said that utility-scale solar projects, for which developers must navigate time-consuming financing and permitting issues can take three to five years to complete. Making the credit available in the first year of construction would provide more certainty for companies making long-term investments in solar energy projects and positively impact sales for companies like SED, which is the third largest solar installer in New York State. Improving the financing of large scale solar projects could help the solar market expand and could allow businesses like SED, Rochester Solar Technologies, Invictus Electrical in Victor, NY, Renewable Rochester in Webster, NY and others create even more middle-class jobs in the Wayne and Monroe County areas.
Schumer is proposing a change to the federal solar investment tax credit that would allow businesses to benefit from this credit when a project commences, rather than when solar panels are finally “placed in service.” Schumer said businesses have previously been able to take advantage of a major tax credit for wind energy when the construction of a project began, rather than when it was completed. Schumer is therefore proposing that the solar investment tax credit follow this same rule. Schumer said changing this rule would provide a further incentive to commence projects that could support jobs at solar companies like Williamson, Wayne County-based SED, O’Connell Electric-owned Rochester Solar Technologies, Invictus Electrical of Victor, NY, and Renewable Rochester located in Webster, NY. Schumer said this would be beneficial for these Rochester- Finger Lakes area companies because they could increase business and help ensure the region can be a leader in solar panel production and installation.
Schumer said that allowing companies to take advantage of this credit after 2016 is also critical, as the solar investment tax credit is about to phase down. After 2016, unless the solar investment tax credit is extended by Congress, the credit will drop to only 10 percent. The solar investment tax credit’s extension is especially important for companies like SED which currently employs 30 workers and plans to hire up to 25 additional seasonal construction workers this fall, Schumer said without this extension past 2016, many solar panel installation projects could be at risk of delays or cancellation due to the impending decrease in the solar investment tax credit value. Schumer said companies should be able to rely on certainty in the tax code in order to appropriately plan their financial future.
Schumer was joined by Sustainable Energy Developments (SED) CEO/Founder Kevin Shulte, Christine Hand Dertinger President of Invictus Electrical LLC, Shawn Lessord, Director of Operations at Renewable Rochester, Dr. Susan Spencer President and Founder of ROCSPOT, Williamson Supervisor James Hoffman, City of Rochester Energy and Sustainability Manager Anne Spaulding.
Kevin Schulte, CEO and Founder of SED said, “The Federal Investment Tax Credit has been instrumental in SED showing 300% growth in employment and revenue since we dedicated ourselves to the solar industry three years ago. It is a fun and exciting industry to be a part of and we are hopeful that Senator Schumer can be successful in his work to change the ITC language so that projects that achieve the start of construction in 2016 can receive the credit and ensuring that wind and solar projects in our queue will get to the finish line and the job growth at SED and in the solar industry nationally can continue.”
Dr. Susan Spencer President and Founder of local solar development association ROCSPOT said, “Our state and our country are in a stage of strong meaningful growth in the solar industry, which now employs more people than the airline industry. Legislation on the ITC is critical to ensure this growth is sustainable, to promote good jobs and solar installs here in New York. Senator Schumer’s efforts will help to foster an environment of demand-driven installations for residents, businesses, and manufacturers.”
The solar investment tax credit has played a critical role in helping jumpstart solar energy projects. With stability provided by the solar investment tax credit, solar costs have dropped rapidly and continuously – the average cost of solar has dropped by more than 73 percent since solar investment tax credit was expanded in 2006. Residential costs have dropped by 45 percent since 2010, while utility-scale costs have dropped more significantly, with recent contracts at prices below $0.05/kWh. The solar industry now employs 174,000 workers in 50 states, including 3,300 in New York, compared to 15,000 workers in 2005.
