The Oregon State Senate has voted to cut the tax incentives for both business and residential solar installations. Near-unanimous votes by both the Senate and House of Representatives saw the House Bill 3672 passed, leaving the future of large-scale solar in the state hanging in the balance.
If, as is expected, Oregon’s Governor, John Kitzhaber, passes the bill into law then the state’s Business Energy Tax Credit (BETC), which offers tax incentives to property owners that make energy-efficient upgrades or install renewable energy projects, will be scrapped. The programme also provides a 50% tax credit to eligible renewable energy manufacturing facilities.
This generous tax credit system, allied with Oregon’s feed-in tariff, created an accommodating environment for solar developers and helped establish the state as one of the US’s solar sector standard-bearers. However, the new bill is likely to compromise this situation, according to John Audley, the deputy director of Renewable Northwest Project.
“They had to reign in the cost to the state of the tax incentive programmes,” Audley said of Senate’s decision. “Some elected officials felt that the renewable energy incentives took priority over state policies like public education.”
“The combination of the feed-in tariff and the BETC and RETC made Oregon a very attractive place for solar installations, especially when it came to rooftops and commercial buildings,” he added. “I think all forms of renewable will be hurt by Oregon’s new policies.”
The new House Bill will replace the BETC with new schemes designed to encourage smaller, community-based projects, ahead of utility-scale solar and wind farms; tax credits will be replaced by up-front incentives, with a two-year US$3-million funding ceiling, an award cap of US$250,000 per project and a maximum project size of35MW.