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Renew U.S. tax credits for solar energy

New York is embracing new ways to generate, distribute and consume electricity, which is translating into an expansion of clean energy and improved consumer choice and affordability. Thanks to these forward-looking and smart efforts—like community net metering and wholesale-distributed generation—solar energy is thriving in New York. The state ranks seventh in the nation for total installed solar electric capacity. A looming federal policy decision in Congress, however, could have an impact on New York’s innovation.

Under the federal solar investment tax credit, which provides a 30 percent tax credit to commercial and residential solar users, total U.S. solar capacity is expected to double over the next two years. This is because demand for solar energy in America is now higher than ever, with solar capacity cracking 22 gigawatts this summer for the first time.

Forty percent of all new electric generating capacity brought online in the first half of 2015 came from solar. Smart government policy, like the ITC, has been crucial in helping the industry reach this height.

As one of the fastest-growing solar markets in the country, New York is expected to double the amount of solar capacity it installed last year to reach over 300 megawatts by the end of the year. This would bring cumulative installed solar capacity in the state to more than 700 MW—enough to power nearly 120,000 New York homes.

It’s not just savvy homeowners or electric utilities that are taking advantage of solar. It’s also good for business. To see how solar energy is improving industry in New York, take a look at the state’s Finger Lakes wine country.

Thanks to the ITC and state incentives, New York wineries are increasingly going solar with the help of a group of local companies that make up the Finger Lakes Solar Co-Op.

Just this summer, four wineries collaborated on solar installations, including a family-owned and operated vineyard situated off Keuka Lake.

Hunt Country Vineyards installed a rooftop system with more than 300 panels. With their investment in solar, the Hunt family’s business has become even more self-sufficient. The new solar system produces 109 kilowatts of electricity that meets 70 to 80 percent of the winery’s electricity needs.

However, the ITC is scheduled to drop at the end of 2016 from 30 percent to 10 percent for commercial users and zero for residential users, which will make it much more difficult for these innovative businesses to thrive and invest in solar.

According to a new analysis by Bloomberg New Energy Finance, the expiration of the ITC will cause a 71 percent decline in solar installations nationwide from 2016 to 2017. This could lead to the loss of more than 100,000 jobs nationwide. Such a dramatic drop would bring new solar installation activity to its lowest annual level since 2012.

Local workforces will be significantly affected. For example, firms like District Sun rely on local electrical, engineering and construction contractors to handle installations of solar systems. An estimated 5,000 man-hours were used to implement the new systems at just four wineries.

Instead of solar becoming a growth engine throughout Finger Lakes wine country and Chautauqua-Alle-geny region, we can expect to see a loss of these new, high-tech career opportunities in these regions if the ITC is allowed to expire.

When compared with current policy, a five-year ITC extension would yield 29 percent more solar in New York from 2016 to 2022, equaling $1.4 billion in additional investment in the state.

An analysis by the Solar Energy Industries Association found that direct solar jobs in the state will be 27 percent higher with a five-year ITC extension than without it. With an ITC extension, more than 10,000 people will work in the New York solar industry by 2021.

The year-end deadline in 2016 to renew the federal ITC for solar energy will be here before we know it. As an industry, we strongly urge New York lawmakers and the state’s congressional delegation to support extending the ITC for five years. By then, analysts predict solar will reach grid parity in most electricity markets.

New York is setting an example for the future of American energy by updating its electric industry with 21st century technologies like solar. Tell Congress not to impede this progress.

Mar Kelly is president of District Sun, a member company of the Finger Lakes Solar Co-Op.

10/23/15 (c) 2015 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or email rbj@rbj.net.

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