Solar Panels and Government Funding
Finally the government is starting realize the true problem the economy is in, and I'm not talking finances. It’s all about our dependency on certain resources like oil and copper that has all of us paying the price for. In this article we will go over the strategy plan the State of California is putting into action, as well as the Federal tax credits that are now available to all American citizens via the Emergency Economic Stabilization Act of 2008. Hopefully once California’s plan takes effect, other cities across the nation will follow suit.
The state of California, Los Angeles in particular is launching “Solar LA”. It’s the largest solar project undertaken by any one city worldwide. The Solar LA plan consists of three primary components: Programs to boost residential and commercial customer solar systems; LADWP (Los Angeles Dept of Water and Power) owned solar projects in Los Angeles; and large-scale solar projects owned by the LADWP outside of the LA basin. In order to get customers to switch they’ve come up with 3 solutions.
Expand Residential Program: Using $313 million in State funds set aside for solar projects. In low-income communities, LADWP will provide free systems to a limited number of customers. LADWP will also extend to residential customers low-interest loans for the installation of solar systems now available to commercial customers. The terms of the loans will be extended to 10 years at interest rates of 5-6 %. Financing models will be developed, such as loans made to residential customers that are repaid through property taxes.
New Feed-in Tariff (FiT): A significant challenge to developing solar projects in Los Angeles has been the long-standing prohibition against non-LADWP entities selling electricity to other customers on the local grid. A Feed-in-Tariff (FiT) would address this problem by allowing a solar developer in the City to sell power directly to LAWDP through a long-term contract between the private seller and LADWP. These third-party sellers could take advantage of tax incentives of 30-60 percent of the installation costs, and after 5-8 years could choose to sell the solar systems to LADWP.
New SunShares Program: For residential customers interested in investing in solar power, but don’t have the means or opportunity to install their own solar systems, SunShares allows them to purchase shares of an LADWP solar power plant. SunShares would leverage the collective purchase power of groups of customers to fund commercially-sized solar power plant built and operated by LADWP. Customers, in turn, would receive their “dividend” through credits on their own energy bills.
On October 3, 2008, by a vote of 263-171, the U.S. House of Representatives passed historic legislation that extends the 30-percent federal investment tax credit for both residential and commercial solar installations for 8 years.
This landmark legislation is part of the Emergency Economic Stabilization Act of 2008. It is the most significant federal policy ever enacted for the solar industry. President Bush has already signed the bill into law.
The solar tax credit provisions will:
Extend for 8 years the 30-percent tax credit for both residential and commercial solar installations;
Eliminate the $2,000 monetary cap for residential solar electric installations, creating a true 30-percent credit;
Eliminate the prohibition on utilities from benefiting from the credit;
Allow Alternative Minimum Tax (AMT) filers, both businesses and families, to take the credit; and
Authorize $800 million for clean energy bonds for renewable energy generating facilities, including solar.