What U.S. Legislation and/or Initiatives are driving solar energy R&D/expansion/usage?
The Advanced Energy Initiative was announced in a 2006 State of the Union Address by then president George W. Bush. The plan called for the Department of Energy to push for breakthroughs in how the nation powers its homes, offices, and automobiles. Increased investment was promised for more zero-emission coal-fired plants, revolutionary solar and wind technologies, and clean, safe nuclear energy, as well as for increased research in improved batteries for hybrid and electric cars, and in pollution-free cars that run on hydrogen.
Solar America Initiative
The Solar America Initiative (SAI) arose from the Advanced Energy Initiative, and is a U.S. Department of Energy (DOE) effort to make solar electricity from Photovoltaics (PV) cost-competitive by 2015 with conventional forms of electricity from the utility grid.
The Solar America Initiative partners include:
- State governments
- Federal agencies
- Other non-governmental agencies.
Benefits to be reaped by the Solar America Initiative include:
- Boosting the economy by creating a U.S.-based solar industry
- Increasing energy security by diversifying the nation's electricity portfolio
- Decreasing the effect of power outages on cities
- Reducing the impact on the environment of power generation from fossil fuels, nuclear energy, and natural gas.
Federal and State Market Incentives
The federal government provides several incentives for the installation of solar energy systems:
- The Residential Solar and Fuel Cell Tax Credit is part of the Energy Policy Act of 2005 (EPAct 2005), which established a 30% tax credit, capped at $2,000, for the purchase and installation of residential solar property.
- Also from the EPAct 2005 is the Commercial Solar and Fuel Cell Tax Credit, which provides a 30% tax credit, without a cap amount, for the purchase and installation of solar energy systems on commercial property. After the tax credit expires, it is to revert to a permanent 10% level. Accelerated 5-year depreciation is also allowed.
The above two tax credits were set to expire at the end of 2008. However, as part of the $700 billion Emergency Economic Stabilization Act of 2008, which was signed into law, these tax credits were extended to 2016, and the stipulated cap was eliminated.
The solar tax credit provisions will:
- Extend for 8 years the 30-percent tax credit for both residential and commercial solar installations;
- Eliminate the $2,000 monetary cap for residential solar electric installations, creating a true 30-percent credit;
- Eliminate the prohibition on utilities from benefiting from the credit;
- Allow Alternative Minimum Tax (AMT) filers, both businesses and families, to take the credit; and
- Authorize $800 million for clean energy bonds for renewable energy generating facilities, including solar.
Wind, Solar Tax Credits Extended in $700 Billion Bail-Out, Environment News Service, 10/03/08, Online: http://www.ens-newswire.com/ens/oct2008/2008-10-03-02.asp
Bailout Bill Signed into Law, Including 8 Year Solar Tax Credit Extension, Solarbuzz, 10/03/08, Online: http://www.solarbuzz.com/News/NewsNAGO370.htm
What federal agency(ies) are funding initiatives?
The Department of Energy (DOE) is the federal agency that is funding solar energy initiatives. The following bar graph illustrates the DOE’s Solar Energy Budget:
The Solar Energy program focuses on solar power R&D that will reduce our nation’s dependence on natural gas and promote a cleaner environment. As part of the Solar America Initiative (SAI), the Solar Energy program is accelerating market competitiveness of solar electricity as industry-led teams compete to deliver less expensive, more efficient, and highly reliable photovoltaic (PV) systems.
Are there states providing legislative direction/funding for solar? If so which states?
Legislation to create incentives or Renewable Portfolio Standards (RPS) has passed or is pending in the majority of states, as illustrated in the graphic below. These standards are stimulating a market for both Photovoltaics (PV) and Concentrating Solar Power (CSP) energy. Additionally, several states have their own solar incentives in place.
Source: DOE, 2008
The Database of State Incentive for Renewable Energy (DSIRE) is a comprehensive source of information on state, local, utility, and selected federal incentives that promote renewable energy, which can be accessed via the following link:
DOE: Energy Information Administration: Solar Thermal webpage: http://www.eia.doe.gov/cneaf/solar.renewables/page/solarthermal/solarthermal.html [Oct. 2008]
DOE: Energy Information Administration: Solar Photovoltaic Cell/Module Manufacturing Activities webpage: http://www.eia.doe.gov/cneaf/solar.renewables/page/solarphotv/solarpv.html [Dec. 2008]
DOE: FY2009 Congressional Budget Request: Budget Highlights: http://www.cfo.doe.gov/budget/09budget/Content/Highlights/Highlight2009.pdf [Feb. 2008]
DOE: Fiscal Year 2009 Budget-in-Brief: http://www1.eere.energy.gov/ba/pba/pdfs/FY09_budget_brief.pdf [Feb. 2008]
Research by Diane Meade