Does the Solar Industry still need 1603 Tax Grant?

The solar industry is quick to point out that it is no longer a “cottage industry”! According to the Solar Energy Industry Association, more solar was installed in the third quarter of 2011 than in 2009 combined. Furthermore, industry experts tell us that in some areas/cases, pv solar power can be delivered at prices competitive with power made from fossil fuels!

Yet, those lobbying for the extension of the 1603 Tax Grant argue that by extending it for 2012, an estimated 37,000 jobs will be created. (EuPD Research)

The main argument for the extension of 1603 from the solar industry is that companies not making a profit, hence not paying taxes, cannot use the credit. From our experience, companies who in 2011/2012 are not making profits have no interest in commercial solar installations on their roofs as they cannot use the depreciation, which changes the payback dramatically. However, the real reason is that companies not making a profit will not invest in non-core activities. It has nothing to do with Grant vs. Credit.

If a company is not making a profit today, why would they make a non-revenue related investment which will pay back in 4-5 years should their machines still be running?

The sooner the solar industry weans itself from Washington, the better the chances are for the industry growing and maturing into a truly sustainable energy source.

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