1603 Investment Tax Credit (ITC) Grant-In-Lieu Should Be Extended For 24 Months Offering Critical Benefit To Solar Farm Investment

1603 Investment Tax Credit (ITC) Grant-In-Lieu Should Be Extended For 24 Months Offering Critical Benefit To Solar Farm Investment

Within the USA in 2011, solar farm project demand might be forecasted to attain 1750MW driven by the utility scale installations. Given the 15% year over year decrease in solar panel cost per watt, unsubsidized solar array install expenditures may drop to $5-$6/watt regarding residential scale together with $3.75-$4 for utility level, which experts claim should help push the United States market demand up 119% yoy in 2011 vs. 800mw in the year 2010. Relying on brand-new developments in energy policy legislation, Commercial Solar Design suggests greater likelihood regarding an extension of treasury cash grant-in-lieu of thirty percent investment tax credit (ITC), which in turn could add considerably to the upside of our outlook and enhance solar farm investment considerably.

Non-residential installs definitely will gain an increased share of the USA PV market with 76% of the market place in 2011, up from sixty nine percent in 2010 (136% year in and year out). Due to the regulatory landscape, while the critical broad energy reform bill has been taken off the table, an important "domestic manufacturing and energy jobs" bill presented in the House of Representatives in the later part of July put forth an extension of the hard cash grant-in-lieu of thirty percent ITC (investment tax credit) . Commercial Solar Design is simply advising that there exists an improved chance of passage of this bill in congress when the Congress assembles after the August break. This particular bill is subsequently likely to possibly be merged with the pending energy bill in the the House or might be connected to the tax extender's bill later in 2010. As a whole, passage of sustainable energy tax credits is certainly high on the agenda of tax committees in the Congress.

The discussion draft of "Domestic Manufacturing and Energy Jobs Act of 2010" unveiled during the last week of July confirms the fact that the extension for the real money grant program for 2 years is the key solar topic contained in the bill. This draft excludes the very much hoped for global warming bill including "cap and trade" and a nationwide RPS (Renewable Portfolio Standard). This watered down version of the "energy" bill is anticipated to be passed in the House of Representatives when United States Congress picks up after the August recess the week of Sept 13th. Nevertheless solar farm investment will proceed together with favorable internal rate of return (IRR) with or without a 1603 extension

The Treasury hard cash grant-in-lieu of the 30% ITC (investment tax credit) program was developed in August '09 to offer an upfront hard cash grant equivalent to thirty percent of the applicable project price to the renewable energy contractors and also developers and including commercial and utility size projects. A sizable majority of the contractors and developers didn't have taxable revenue make use of the 30% ITC (investment tax credit), and for that reason, the cash grant program was obviously a great incentive for the solar power contractors/developers. For the reason that there seemed to be an absence of clarity around the taxability of the cash grant until late April the incentive ended up being underutilized.

This Treasury cash grant program became a most important economic success and extension of the program will provide considerable upside to solar farm investment and demand estimates in 2011.

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