1603 Investment Tax Credit (ITC) Grant-In-Lieu To Be Extended For Two Years Offering Important Benefit To Solar Farm Investment

Inside of the U.S. in 2011, solar farm project demand may be forecasted to reach 1750MW led by the utility scale installations. Given the fifteen percent yoy decrease in solar panel cost per watt, unsubsidized project build expenditures will drop to five to six dollars per watt for non-commercial scale not to mention $3.75-$4 for utility level, which in turn will help push the U.S. market demand up 119% year in and year out in 2011 versus 800mw in '10. Based primarily on the latest additions in energy policy legislation, Commercial Solar Design suggests greater odds associated with an extension of treasury hard cash grant-in-lieu of thirty percent investment tax credit (ITC), which might possibly add significantly to the upside of Commercial Solar Design's forecast and enhance solar farm investment substantially.

Non-residential installs will achieve an increased share of the USA PV market with seventy six percent of the market in 2011, up from sixty nine percent in 2010 (136% year in and year out). In terms of the regulatory landscape, despite the fact that the critical broad energy reform bill has been removed from the table, a "domestic manufacturing and energy jobs" bill presented in the US House of Representatives in the later part of July included an extension for the hard cash grant-in-lieu of thirty percent investment tax credit (ITC) . Commercial Solar Design is definitely advising that there does exist a much higher likelihood of passage for this bill in congress when the Congress assembles following the August recess. This specific bill is subsequently likely to be combined with the pending energy bill in the the House or may very well be attached to the tax extender's bill later on in 2010. As a whole, passage of renewable energy tax credit is certainly high on the agenda of tax committees in the Congress.

The discussion draft of "Domestic Manufacturing and Energy Jobs Act of 2010" announced in the last week of July confirms the fact that the extension for the cash grant program for two years is the key solar topic as part of the bill. The draft excludes the very much hoped for climate change bill including "cap and trade" together with a nationwide RPS (Renewable Portfolio Standard). This watered down package of the "energy" bill is expected to be approved in the US House of Representatives when United States Congress resumes following the August recess the week of Sept 13th. Having said that solar farm investment can proceed because of favorable IRR (internal rate of return) with or without the need for a 1603 extension

The Treasury hard cash grant-in-lieu of the 30% ITC (investment tax credit) program was launched in August 2009 to offer an upfront real money grant equivalent to 30% of the applicable installation price to the renewable energy contractors together with developers and including commercial and utility scale projects. A substantial majority of the contractors and developers don't have taxable profits to make use of the thirty percent ITC (investment tax credit), and therefore, the cash grant program has been a huge incentive for the photovoltaic contractors/developers. Considering the fact that there seemed to be a lack of understanding around the taxability of the cash grant until late April the incentive was in fact underutilized.

The Treasury hard cash grant program has been a considerable success and extension of the program will furnish considerable upside to solar farm investment and demand estimates in 2011.

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