Tax laws are causing a solar installation frenzy, trying to beat end of 2008 tax credit expiration


Photo courtesy of
M.Barkley at Flickr.com.

At the end of this year, an elevated tax credit for for alternative energy projects is set to expire. These federal tax credits will decline from 30% of the total construction cost to just 10%, and several alternative energy groups have been lobbying Congress to extend the benefit. Even though some states and local power companies offer additional incentives to invest in alternative energy, the reduced Federal tax credits will have wide ranging effects. Industry experts and analysts expect companies who sell solar, wind, biogas, microturbine, and fuel cell technologies could be wiped out by reduced tax credits:

Without the credits, “I’ll essentially be out of business,” Tamas said. “Solar will be dead, other than for a little bit of residential.”

Congress was expected to renew these popular tax credits, but the Senate and House have gone into recess without doing so. Since many of these projects require months and months of construction time, there could be a lag in construction even if the credits are renewed in September. In the near term, the uncertainty is creating a solar building boom.

Many big retailers are attempting to complete green energy projects before the tax credits expire on December 31st. Wal-Mart, Kohl’s, Whole Foods, Safeway, REI, and BJ’s Wholesale club are just a few major companies that are accelerating their solar installation plans to beat the deadline. This means that solar workers are pulling overtime and likely to see big bonuses this year, but they may be getting pink slips in the spring.


Photo courtesy of
EGL Energy at Flickr.com.

paystolivegreen.com August 17, 2008 at 2:54 pm

I think it is ridiculous that our government can pass tons of stupid bills, but can’t seem to continue this tax credit. It is obvious a bill like this is need to continue to get renewable energy in America much more widespread than it already is. I saw earlier in the news that a huge solar power plant may not be built because of this tax credit. All I can do is shake my head at this one….

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