Solar: A Ray of Light in Bailout Bill
Alternative energy to benefit from tax credits.
The package included about $18 billion in renewable energy tax credits, and thus breathes new life into solar, wind and other clean-energy industries in the United States. If there's to be a green revolution in this country, those tax credits set the wheels -- or rather, the photovoltaics -- in motion.
The vote on tax credits ended more than a year of squabbling between the House and the Senate. The credits would have expired at the end of the year; some solar companies had argued that they wouldn't be able to build more US plants without them. In fact, the Senate had previously rejected the bill 8 times. (John McCain, it must be noted, missed all 8 of them, essentially voting no.)
"By passing this bill, Congress has finally given the solar energy industry the 'policy certainty' that will attract investment, expand manufacturing and lower the cost of solar energy to consumers," Roger Efird, president of Suntech America (STP), said in a statement. "This will allow companies like mine to move forward with expansion plans to serve the growing US market."
Suntech, a major Chinese-owned solar panel maker, had been exploring this country for sites to build a plant. Several governors had been courting them. But according to a column Thomas Friedman wrote in the New York Times in mid-August, Efird said that when the solar credits failed to pass the Senate for the eighth time, his boss told him: "Don't set up any more meetings with governors. It makes absolutely no sense to do this if we don't have stability in the incentive programs."
That's all changed - both for companies like Suntech and for individual Americans. For example, the tax credits will go to businesses that build and operate solar and wind power plants - or directly to homeowners who install small wind turbines on their properties.
The solar industry is the greatest beneficiary. The tax credits for solar initiatives run for 8 years, which is particularly important for big projects that need to arrange financing in the next year or so. In addition, the $2,000 tax credit limit for residential solar systems has been lifted, meaning that homeowners can get a 30% tax credit on the solar panels they install starting next year. And this time utilities can also take advantage of the tax-advantages.
First Solar (FSLR) is like Ra in Ancient Egypt: The god of sun. The Arizona.-based company is the industry leader. Since its inception in 1999, First Solar's technology has been embraced; but not domestically, rather, in Europe. The company has more than a half-billion in cash on its balance sheet and revenues have been checking in at a triple-digit pace. Once America comes online, the sky is the limit.
Earlier this week, First Solar expanded its Perrysburg, Ohio facilities; at the groundbreaking, Governor Ted Strickland said: "Advanced energy can not only power our homes, it can power our economy."
I think Strickland is right. With these tax credits, America has the opportunity to lead the world in the next great industrial revolution. But this time, it won't be covered in soot.
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