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U.S. Budget Deal A Boon For Solar And Wind

As Britain’s Conservative government moves to reduce subsidies for renewable energy technology, the U.S. Congress appears at least to have suspended its partisan legislative logjam and approved an extension of generous financial assistance to the industry.

This small part of a huge spending package has gone almost unnoticed by the general public. Most of the attention in the American media focused on how passage again narrowly prevented a government shutdown and on the rare bipartisan support the measure received in a sharply divided Congress. The total $1.15 trillion bill still awaits full congressional approval, as well as President Obama’s signature.

The subsidy part of the package, approved by Congress on Dec. 15, lets solar power companies to continue taking advantage of tax credits at 30 percent of the price of a solar panel system, whether it’s a modest home solar kit or a huge commercial solar farm. The credit now will last through 2019, then will shrink gradually to 10 percent by 2022.

Related: The Golden Age Of Coal In China Is Over

The credits for new wind-power projects as well as solar had been set to expire. In fact, the wind subsidy, on paper at least, lapsed at the end of 2014, but many developers of wind farms who already had begun construction before that deadline were eligible for the subsidy in 2015. The subsidy for solar energy had been set for a significant reduction at year’s end in 2016.

The subsidy extension in a Congress dominated by conservative Republicans contrasts sharply with Britain’s Tory government, which announced in July that it plans to cut its financial support for solar energy, arguing that the technology had advanced so far in recent years in the kingdom that there was no need for its taxpayers to keep supporting it.

British Energy Secretary Amber Rudd reinforced this message three months later during the annual conference of the Conservative Party in Manchester, saying there was no “magic money tree” to finance such subsidies, and that the solar energy industry will thrive without help.

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On Nov. 30, Britain’s Solar Trade Association directly contradicted Rudd’s assessment of the health of its industry. It said the expectation of such a deep cut in the solar subsidy had led to the bankruptcies of three solar energy companies and led to the loss of nearly 1,800 jobs.

Evidently the opposite will be true in the United States. The Solar Energy Industries Association, based in Washington, says the renewal of the U.S. subsidies could mean as many as 140,000 new jobs to the 200,000 employees currently working in the solar industry alone.

Leaders in the green energy industry praised the extension of the U.S. subsidies. One was Lyndon Rive, the CEO of SolarCity of California, the largest American home solar company. He welcomed “the bipartisan agreement that prioritizes the growth of solar in the United States.”

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And that growth will be “massive,” according to Ethan Zindler, the head of U.S. policy analysis at Bloomberg New Energy Finance (BNEF). It estimates that the subsidy extension will add an extra 19 gigawatts of solar power over five years – enough to power 8 million homes – and generate more than $73 billion in investment through 2021 – $38 billion in solar and $35 billion in wind.


The costs of solar and wind energy have been declining steadily throughout the United States in recent years, but in many areas coal and gas remain the least expensive power options. But by the time the extended tax credits expire, BNEF reports, solar and wind will be the most affordable options for generating electricity in many parts of the country.

By Andy Tully of Oilprice.com

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  • Leo Kobrinsky on December 22 2015 said:
    Few more Solyndras are coming?

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