Where has the tax equity for solar gone?
Ulteig talks with SEIA about the impact The ITC made into direct pay opportunities, the impacts of COVID-19 and the future of the solar market in this new world.
For the first few months of 2020, in what was widely considered “the kickoff” to the $500 billion+ solar decade, the COVID-19 crisis wreaked significant damage on the renewables sector. Thousands of jobs were lost and projects from coast to coast were in jeopardy.
How profound and widespread the impact will be is still uncertain, but there are reasons for optimism that the projects pushed to the right are simply delayed or deferred rather than canceled.
In our second installment of the “Energy & Infrastructure”podcastseries, host Aaron Lauinger, joined by Chad Crabtree, Renewables Market Director at Ulteig and Dan Whitten, Vice President of Public Affairs, Solar Energy Industry Association (SEIA), discuss the impact of COVID-19 on the renewables sector and how a few simple policy changes to the federally funded Solar Investment Tax Credits (ITC) could rejuvenate the solar industry.
While disruptions to the global supply chain and hefty tariffs on equipment shipped from China were already causing problems, U.S. renewable energy companies are struggling to qualify for ITC. With a shrinking tax equity market in today’s less than stellar economic climate, revising this policy could ensure the renewables sector helps bolster the economy in 2020 as it did with the 2009 ARRA.
The energy economy is struggling, but Dan Whitten suggests merely revising the ITC into a direct pay opportunity instead of having to get tax equity from a bank could make a big difference. It would have the same costs as the tax credit but would be delivered in cash, so projects wouldn’t have to shop around for tax equity.