With the big, bad bailout hogging most of everyone's time, it's amazing that our legislators got anything else accomplished this week. In a sure-to-be-underreported event, the Senate on Tuesday approved a bill extending the investment tax credit (ITC) for various renewable energy sources.
The meatiest piece of the bill definitely goes to the solar industry. A solar tax credit, set to expire at year's end, would be extended for eight years. This credit amounts to 30% of the cost of installation for both residential and commercial installations. A $2,000 cap on the residential credit would also be removed.
This legislation has been voted down more times than I can count, and -- along with some Spain pain -- has weighed somewhat heavily on the solar sector. The market response today is justifiably giddy, with Yingli Green Energy
The importance of this legislation goes beyond simply getting more panels on more rooftops. Suntech Power
I know that not all of my readers will be happy to subsidize energy production that isn't cost-competitive today. Given past adventures with synthetic fuels and other technologies, our country's record is spotty in that regard. But between supporting a rapidly growing industry with a fairly clear roadmap to profitability, and an industry that made reckless lending, securitization, and rating decisions -- imperiling our whole economy in the process -- I'll opt for the former support any day.