Wall Street Journal
By Cassandra Sweet
Solar and wind companies scored a major victory when U.S. lawmakers voted to extend lucrative federal subsidies for renewable energy late Tuesday night.
The tax credits for new power projects fueled by wind turbines and solar panels have been key to the rapid expansion of renewable energy from California to Massachusetts. But those credits were set to expire. The wind subsidy technically lapsed at the end of 2014, though many wind farm developers who had started construction were able to tap it this year; the solar subsidy was scheduled to shrink significantly at the end of next year.
The extension of the environmental tax credits came as part of the $1.15 trillion federal spending bill, which averted a government shutdown and lifted the 40-year-old ban on exporting American crude oil. Both the House and Senate still must pass it and President Barack Obama must sign it into law.
The legislation allows solar power companies to keep claiming federal tax credits at 30% of the price of a solar array. The credits, which apply to home solar kits as well as big commercial installations, will be good through 2019. After that the credit will begin to drop, declining to 10% in 2022 where it will remain.
The credits go to homeowners who buy solar arrays. If they lease solar equipment from providers like SolarCity Corp. and Sunrun Inc., the tax credits go to those that finance home installation projects, which are often banks such as Goldman Sachs Group Inc and J.P. Morgan Chase & Co. That is also true for big industrial projects.