The United States House of Representatives extended the investment tax credits grant program (ITC Grant Program) today, a huge victory for the solar industry. The ITC Grant Program provides grants in the amount of thirty percent of a project’s costs, and is one of the single most important pieces of legislation for commercial solar development currently. The ITC Grant is often combined with Sol Systems’ Sol Up-Front (which provides up-front financing based on SREC production) to help pay down much of the costs of a system within 90 days of installation.
The program was created by the American Recovery and Reinvestment Act (Section 1603) to provide commercial solar installations with a cash grant in lieu of the 30 percent solar investment tax credit (ITC). The ITC actually went into law in 2008, but the economic conditions created by the global recession, and the lack of tax appetite on the part of many institutional investors, meant that few institutional investors could utilize the ITC. The 1603 Program allows the Treasury to effectively purchase the tax credit from solar developers through the 30% grant.
So far, the ITC Grant has helped more than 1,100 solar projects in 42 states and has supported $18 billion in investment. The program has been critical in allowing the solar industry to grow by over 100 percent in 2010, create enough new solar capacity to power 200,000 homes and provide work to more than 93,000 Americans.