After a year of stalemate that threatened to strangle the nascent United States solar industry, the U.S. Senate on Tuesday passed energy legislation that extends a key investment tax credit until 2016.
The 30% solar tax credit was part of a package of green energy incentives that includes a one-year extension of the production tax credit crucial to the wind industry and a $2,500-$7,500 tax credit for people who buy plug-in electric vehicles. (That should make General Motors (GM) happy as it prepares to roll out its ever-increasingly expensive Volt plug-in electric hybrid.)
Homeowners also won an extension of a tax credit for installing solar panels and the $2,000 cap on such systems was lifted. Put in a small wind turbine or a geothermal heat pump and you can claim up to a $4,000 and $2,000 tax credit, respectively.
The big winner was the solar industry. Congress’ failure to extend the investment tax credit threatened to scuttle scores of multibillion-dollar solar power plants in the pipeline and undermine mandates that utilities like PG&E (PCG) and Southern California Edison (EIX) obtain a growing percentage of their electricity from renewable sources.
The legislation now returns to the House of Representatives, which earlier passed a similar version of the Senate bill.