Congress has passed the Emergency Economic Stabilization Act of 2008 with the support of senators Obama and McCain. The news is welcomed by the solar industry but unusually was met by traders with a plunge in the value of solar stocks.
While most will focus on the financial implications of the bailout bill, the solar industry can finally plan ahead with the knowledge that the American government will continue to substantially support the sector for the next eight years. The package includes extension of many tax measures, such as an eight-year extension of the investment tax credit (ITC) for solar energy through 2016 and a two-year extension of the R&D tax credit through 2009.
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The R&D tax credit expired on December 31, 2007 and the solar energy ITC was set to expire at the end of this year.
Victoria Hadfield, president of SEMI North America, commented, “The extension of critical tax measures will have a significant impact on the economy through the creation of many new highly skilled positions and ensuring a continued U.S. leadership position for technological innovation. SEMI commends the Congress for their commitment to basic research and to promoting a solar energy industry in the United States.”
In a recent study released by Navigant Consulting Inc., researchers estimated that extending the solar ITC for a full eight years could support 1.2 million employment opportunities, including 440,000 permanent jobs. In addition to the creation of jobs, the report estimates $232 billion of investment in the solar energy industry in the United States during this timeframe.
The passing of the bill marks an historic day for the development of the solar industry and is welcome news after recent reductions in the German feed-in tariff and the 500MW cap put on the Spanish market last week.
You can see the results at the Congress website here and the entry in the Library of Congress here.
Unusually the news led to a sell off of many ‘blue-chip’ solar stocks including First Solar, Suntech and Sunpower, raising suspicion of increased short-selling practices on Wall Street. Barrons Blog tracks the fall of leading solar stocks after the bill was passed by Congress here.
— David Owen