President Obama, in presenting his proposed Federal Budget has proposed that the solar power Investment Tax Credit (ITC) be extended permanently in the 2016 budget.
Under the new budget, there would be funding of $7.4bn for clean energy alongside $4bn for states to accelerate their carbon reduction plans.
The ITC, which was introduced in 2006, has allowed solar power developers to write off tax equivalent to up to 30% of the development costs of solar projects once projects come into service.
Ten months ago, SEIA released a statement outlining its concerns over the ITC’s then-deadline of the end of 2016. Speaking then, Rhone Resch, president and CEO of the body, said that the introduction of the ITC had seen installed solar capacity in the U.S. rise from 680 MW to 13 GW, and had created 143 000 well-paying roles.
In addition to an extension of the ITC, the budget also extended permanently the production tax credit linked to the wind industry.
One Reuters report quoted an anonymous source who said that both budgets could be used primarily to fund programs at the Department of Energy and the Department of Defense. The $7.4bn allocation is a major increase over the $6.9bn of last year’s budget and the $6.5bn of the year before that.
Obama’s budget includes a nearly 45% boost in funding for the federal government’s solar energy technologies program within the DOE’s Office of Energy Efficiency and Renewable Energy.
Overall, the budget request of $336.7 million for the solar program compares to $233 million in 2015 and approximately $257.1 million in 2014. The budget proposal, which must be approved by Congress, includes a $26.7 million jump in funding for photovoltaic R&D next year to $62 million. That compares to $35.3 million in 2015 and $56 million in 2014.
The request also includes an additional $26.6 million for balance-of-systems cost reduction to $67.3 million in 2016 compared to 2015, and an increase of $15.6 million for innovations in manufacturing to $73.4 million.
Concentrated solar power would receive only $2 million more in 2016 at $48.4 million compared to 2015.
The funding increase comes as the US solar installations are reaching record highs and amid a revival in US solar manufacturing, he added.
Last week, the DOE’s Sunshot initiative announced a new $45 million funding opportunity to support US solar manufacturing innovation and scale-up.