The rescue package approved in late October by the Congress included various incentives for energy projects including solar energy. A 30% tax credit for solar projects was extended for another 8 years until 2016. This investment tax credit means that companies that purchase solar energy equipment for commercial use can claim 30% of the cost in the year the equipment is put to use. Initially the deadline for putting the equipment to use was 2008 but it was extended until 2016. Originally, companies were able to use the investment tax credits to reduce the tax payments by up to 75% but not less than the minimum taxes calculated using the broader definition of taxable income. The new bill made this provision more favorable by simply allowing a reduction of taxes using such credits by up to 75%.
These, along with other provisions of the bill, are indicative of the Congress’s commitment to development and implementation of renewable energy technologies. Solar technologies have experienced very rapid growth in the recent years and concentrated solar power projects have enabled power production at costs that are economical even without subsidies.
The next few years shall bring about development of vast solar power fields around the world and as such, over time global dependence on coal and other forms of energy produced from fossil fuels will decrease and will be replaced with renewable sources. With the sun being such a vast resource and with recent leap in solar power technologies solar will be the big winner.
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