SCHUMER SECURES MAJOR VICTORY FOR UPSTATE NEW YORK AND SOLAR CITY; SAYS TAX EXTENDERS PACKAGE INCLUDES LONG-TERM EXTENSION OF SOLAR TAX CREDIT THAT IS VITAL TO CLEAN ENERGY, JOBS & SOLAR CITY’S SUCCESS IN WNY AND 1366 TECHNOLOGIES IN GENESEE COUNTY
During SolarCity Visit In August, Schumer Said Tax Incentive Allows Savings on Investment in Solar Projects, However Tax Credit Was Scheduled To Phase Down After 2016 and Companies Only Receive Benefits Upon Completion Of A Project
Schumer Not Only Pushed to Include Long-Term Extension of Tax Benefit, Also Revised Provision That Prevented Businesses, Residents And The Solar Power Industry From Reaping Full Financial Benefits, If Passed, Bill Would Help Expand Clean Energy & Create Even More Middle-Class Jobs
Schumer: Extension and Changes To Solar Tax Credit Would Power Up New American Jobs At SolarCity And Beyond – And Boost The Fight Against Global Warming
U.S. Senator Charles E. Schumer today announced that that a number of vital tax benefits for New Yorkers were included in the omnibus appropriations bill – which is considered must-pass legislation for the end of the year. In the extenders package, Schumer secured the inclusion of a key tax benefit for the solar industry, called the solar investment tax credit (ITC). The legislation includes an extension of the full 30 percent federal solar ITC for commercial and residential projects through 2019, with a phase down of 26 percent for 2020, 21 percent for 2021 and 10 percent for commercial projects after 2021. The long term extension of this major tax credit would both boost clean energy and support jobs at solar companies like SolarCity in Buffalo and 1366 Technologies in Genesee County. Schumer also secured a change to the current solar ITC eligibility rules so that companies can take advantage of the ITC in the year that solar projects begin construction. Current eligibility rules do not allow businesses to gain from the tax credit until the solar panels they install are “placed in service.” Schumer said that current rules create uncertainty for customers because they are not guaranteed a tax credit until a project is completed, which creates a disincentive to take the credit. Schumer said this tax credit extension – along with this critical revision – would greatly help companies across Upstate NY maintain jobs and contribute to the regional economy.
“The extension of this critical tax credit – as well as the provision that would allow companies to take advantage of this credit when they begin construction – is a win-win for clean energy and new American jobs at places like Solar City in Buffalo and 1366 Technologies in Genesee. This will help power up thousands of jobs in Western New York. I am urging my colleagues on both sides of the aisle and in both chambers of Congress to vote for this bill so we can send this to the President’s desk,” said Schumer. The more businesses that can utilize this incentive to get projects underway, the more good-paying, local jobs companies like SolarCity can create as they contribute to the regional economy and build a clean energy economy that addresses global warming.”
The ITC is a 30 percent tax credit for both residential and commercial solar systems. The solar ITC was scheduled to drop to from 30 percent to 10 percent for commercial projects after 2016. The extension of this tax credit means that SolarCity’s Buffalo plant would be able to take advantage of the credit when it is up and running in 2017. The commercial solar ITC has been essential for the financing of utility scale and residential solar projects. It has been critical in helping this emerging industry expand and according to the Solar Energy Industry Association the market certainty provided by a multiple-year extension of the residential and commercial solar ITC has helped annual solar installation grow by over 1,600 percent since the ITC was implemented in 2006. SolarCity helps their customers realize the benefits of the benefits of the solar ITC by helping their customer’s file paperwork to claim the credit. Additionally, the credit supports the Obama administration’s goal of getting 28 percent of power from renewable energy sources, like wind and solar, by 2030. Schumer secured the long-term extension and modification of this tax credit to keep the solar industry thriving in upstate New York and around the country.
Apart from securing an extra five years for this credit, until it phases down to 10 percent, Schumer secured a modification of the ITC which would allow solar developers to benefit from a solar project when the year they commence construction. Current solar ITC eligibility rules that do not allow businesses to gain from the tax credit until the solar panels they install are “placed in service.” Schumer said that current rules create uncertainty for customers because they are not guaranteed a tax credit until a project is completed. Schumer said that utility-scale solar projects, for which developers must navigate time-consuming financing and permitting issues can take three to five years to complete. In contrast, businesses can take advantage of a major tax credit for wind energy soon after they begin construction of a wind project. Schumer called for parity between the wind and solar tax incentives so that developers in both industries could take advantage of these credits when they commence construction. Making the credit available in the first year of construction would provide more certainty for companies making long-term investments in solar energy projects and positively impact sales for companies like SolarCity. Improving the financing of large scale solar projects would help the solar market expand and could allow SolarCity to create even more middle-class jobs in the Western New York region.
The solar ITC would also indirectly help photovoltaic component manufacturers, such as 1366 Technologies, which will begin construction next year on a 130,000 sq ft manufacturing facility that will anchor the Western New York Science Technology Advanced Manufacturing Park (STAMP) in the Town of Alabama in Genesee County. The facility, that is anticipated to open in 2017 and employ up to 600 workers in its first five years, will produce high-performance silicon wafers using the company’s proprietary Direct Wafer™ technology. Since wafers are the building blocks of solar panels, increasing the production and installation of solar panels will provide benefit to component manufacturers such as 1366 Technologies.
Despite solar energy’s rapid growth, it still only accounts for less than 1 percent of all U.S. electricity production. Schumer said that while many businesses and residential developers are beginning to install solar panels to save on energy costs and operate in an environmentally conscious manner, there needs to be a concentrated effort to help facilitate the increased use of solar technology. Without this vital credit the Solar Energy Industry Association projected the loss of 80,000 jobs nationwide in the solar industry alone.
The solar ITC has played a critical role in helping jumpstart solar energy projects. With stability provided by the solar investment tax credit, solar costs have dropped rapidly and continuously – the average cost of solar has dropped by more than 73 percent since solar investment tax credit was expanded in 2006. Residential costs have dropped by 45% since 2010, while utility-scale costs have dropped more significantly, with recent contracts at prices below $0.05/kWh. The solar industry now employs 174,000 workers in 50 states, including 3,300 in New York
In 2014, SolarCity acquired Silevo, a company that produced high-tech Triex panels for solar energy production. At the time of SolarCity’s acquisition, Silevo had an agreement in place with New York State officials to build a solar panel manufacturing facility in Buffalo. SolarCity promised to honor Silevo’s commitment to keep the facility in Buffalo. Once completed, the facility will include a 1 million square foot manufacturing factory on a site located at Riverbend in Buffalo. Solarcity anticipates the facility will be completed in the third quarter of 2016 and will be fully operational in 2017. The project will create nearly 3,000 jobs, including 1,460 high-tech jobs at the SolarCity facility and an additional 1,440 supply-chain jobs. Jobs are expected to pay roughly $45,000 for manufacturing jobs, and up to more than $100,000 for higher-skilled engineering jobs.
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