| SEIA Releases Guide to New
Federal Tax Credits for Solar Energy
To assist companies and consumers in claiming new federal tax credits
for solar energy, the Solar Energy Industries Association (SEIA) has
released a comprehensive tax manual. The
SEIA Guide to Federal
Tax Credits for Solar Energy was prepared by SEIA and the law firm
of Chadbourne & Parke, LLP. Federal solar tax incentives enacted in the Energy Policy Act of 2005 allow homeowners a tax credit of 30 percent for qualifying solar electric (PV) or solar water heating expenditures, up to a maximum of $2,000 per technology. For businesses, the investment tax credit is increased from 10 percent to 30 percent of qualified solar property expenditures, with no cap on the credit amount. These incentives apply to equipment placed in service during 2006-07. "The passage of the solar tax credits was an historic moment for solar energy development in the United States," said Rhone Resch, president, SEIA. "Already, the tax credits are encouraging states and private industry to invest in solar power, fueling market growth and making solar more affordable for more Americans. This tax manual provides guidance for solar companies and consumers to fully utilize the federal incentives." The Internal Revenue Service is not expected to issue specific regulations on the solar tax credits in the near term. The SEIA tax manual's interpretation is based on legislative language and intent, as well as existing precedent, particularly for the commercial tax credit. Readers are strongly advised to consult their tax professional when using the information contained in the manual. Under current law, only consumer spending in 2006 and 2007 qualifies for the new solar tax incentives. However, with a long-term energy crisis already having a significant economic drain on the US, the solar industry is urging Congress to extend the solar tax credits as a practical energy solution that can deliver immediate results. "SEIA will be working this year with our champions in Congress to extend the tax credits through 2012 or later," said Resch. "We have an opportunity to create a thriving solar market here in the US, but clearer policy support from Washington is needed. We call on all companies in the industry to join us in this effort and become SEIA members."
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