The solar industry has its roots in America. American inventors Charles Fritt, Edward Weston, Nikola Tesla, and Albert Einstein (who won the Nobel Prize in 1922 for his paper on the photoelectric effect) led the innovation of the technology. American scientists at Bell Labs and Western Electric helped commercialize solar in the 1950s. The American government and NASA helped drive efficiency into the technology during the space race. These American pioneers were the foundational blocks of a modern billion dollar industry which employs hundreds of thousands of people in almost every state in our nation, and many times that globally.
In the decades since, our industry has collectively built a power generation infrastructure that is revolutionary. It runs each minute each hour in each day across every state in our country and emits no carbon, no particulate matter, and no mercury. These are power plants that we can take our children to one day. This is an industry which we can be proud of.
Unfortunately, it is an industry that is at risk.
In the next 12 months each of us will either collectively take action to extend the federal investment tax credit (ITC), set to drop by 66%, or we will not. The planned reduction in the ITC is projected to cut solar installations by half, immediately setting the solar industry back five years and leading to the lowest annual amount of solar installed since 2012. It is estimated that the ITC step-down will cost one of America’s fastest growing industries 100,000 jobs. We have estimated that it shrinks the addressable market by 20-30%, immediately.
The federal ITC for solar is not all that different than incentives that help families buy their homes, incentives that help employers fund employee health care, and incentives that drive innovation within technology and pharmaceutical companies. The federal ITC is just much, much smaller (the health care incentive is estimated to be over $150 billion annually). Other energy sources receive incentives; the fossil fuel industry receives estimated subsidies of $10 million each minute, and the nuclear industry would not exist without the Price Anderson Act that protects its investors from liability.
Tax incentives should be used intelligently to drive innovation and support emerging technologies that have a net benefit to society. In the next decade we must replace hundreds of old electricity generation units that are decades old with new wind, solar, and natural gas facilities. We have to fundamentally rethink how we produce, transport, store, and use electricity. Now is not the time to cripple one of the most promising technologies and industries we have at our disposal. Now is the time to invest and incentivize growth and maturation.
Sol Systems advocates for a 3-5 year extension of the ITC, with a step-down and eventual expiration thereafter. We believe that an extended ITC and a more calibrated step-down will enable the technology to evolve, and drive the industry to mature, so that both can contribute more effectively to our energy future. We believe that solar is one technology among many that should be part of our energy future. The solar industry was born in America, it employs and empowers Americans, and it powers America.
Over the next year, you’ll see several efforts that demonstrate our support and dedication for a stronger and better calibrated federal policy. I am currently running for the Board of SEIA and have committed to working closely with the organization to help extend the ITC. This week, we launched a website, Raceto2017.com, to help educate consumers, public officials, investors, and the solar industry at large about the ITC extension and empower them to make their owned informed decision. The website provides broad resources including articles, an interactive map and legislative materials in concert with SEIA and will continue to evolve. We’ll also be dedicating large financial resources to support the extension of the ITC, and we plan to work hand-in-hand with our financial partners and investors to educate and strategize with policymakers.
A fundamental question for each of us is whether the future is crafted for us, or whether we craft that future. In 2008 we established Sol Systems as a vehicle to empower ourselves and others alongside us to build concrete, lasting and positive change in the world. Almost eight years (and 50 additional employees) later, we stand by that mission.
We ask you to join us to devote your time and your resources to extend the ITC. Please contact Sara Rafalson at firstname.lastname@example.org if you’re interested in working with us.
Let’s build this industry into all that it can be.
ABOUT SOL SYSTEMS
Sol Systems is a solar energy finance and investment firm. The company has facilitated financing for 333MW of solar projects on behalf of Fortune 100 corporations, insurance companies, utilities, banks, family offices, and individuals. Sol Systems provides secure, sustainable investment opportunities to investor clients, and sophisticated project financing solutions to developers. The company’s tailored financial services range from tax structured investments and project acquisition, to debt financing and SREC portfolio management. Inc. Magazine named Sol Systems on its annual Inc. 500 list of the nation’s fastest-growing private companies for a second consecutive year, ranking it No. 6 in the nation’s top solar companies in 2014. For more information, please visit www.solsystems.com.