SENATE REJECTS CRUCIAL SOLAR TAX CREDIT

U.S. Senate Rejects Amendment To Extend Section 1603 Program
Jessica Lillian, 13 March 2012 (Solar Industry)

"An amendment…that would have extended the U.S. Department of Treasury's Section 1603 program and other renewable energy tax incentives failed to receive approval from the U.S. Senate…[The] legislation sought to revive the Section 1603 program and other incentives via an amendment to the Surface Transportation Bill (S.1813), legislation focusing on highway improvements…[The #1812 (Energy Tax Extenders) amendment] needed to receive 60 votes in order to be included in S.1813. However, it received just 49 votes…

"The 1603 program provided a 30% cash grant in lieu of tax credits to eligible solar projects and proved to be extremely popular among U.S. solar developers until its expiration. The renewal of this program ranks among the top legislative priorities for the Solar Energy Industries Association (SEIA) and many solar firms."

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"However, given that the 1603 program just ended a few months ago, the full effect of its expiration remains to be seen…Further complicating matters are provisions that allow certain solar projects grandfathered in under the safe-harbor deadline of Dec. 31, 2011, to remain eligible for a cash grant…

"…[The] vote was widely regarded as one of the industry's primary chances for seeing a 1603 extension…[but] other avenues still exist. President Obama's proposed fiscal-year 2013 budget, for instance, provides for an extension of the 1603 program. However, this budget must clear a series of legislative hurdles in order to be implemented as originally written…The solar sector also recorded a small victory…[when an amendment] to repeal all energy tax credits, including the investment tax credit (ITC) for solar energy, and replace them with a lowered corporate tax rate [was defeated]…"