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Dec. 2 — Lawmakers in Washington are considering a multibillion-dollar extension of a tax credit for the solar industry, but one Houston-based solar panel installer is saying “no thanks.”
In a letter to leaders of the House and Senate tax writing committees, Sunnova Energy Corp. said an investment tax credit offered to commercial and residential solar projects should be allowed to expire.
“Extreme claims are being made about the number of jobs that will be lost and the number of companies that will go out of business once the ITC steps down or sunsets as planned,” Sunnova Chief Executive Officer William J. Berger wrote. “At Sunnova, we respectfully disagree with these claims. We firmly believe the ITC has served its purpose and that it is now time to allow it to step down as planned.”
At issue is a 30 percent tax credit that drops to 10 percent for commercial projects and expires for residential solar projects at the end of 2016.
Leaders in the solar energy industry have been lobbying Congress hard to ensure that credit is extended and also broadened, arguing that plans to let it end have led large solar developers to cancel projects and that its expiration for residential projects puts at risk a record expansion of U.S. solar installations.
“The ITC is the linchpin of the success of the third-party financing model that has allowed solar to boom in the U.S.,” Suzanne Merkelson, spokeswoman for San Mateo, Calif.–based SolarCity Corp., previously told Bloomberg BNA.
Congress so far appears to be receptive to their argument. Lobbyists said a broader year-end deal on dozens of expiring tax credits included an extension of the credit, which would be gradually phased out over five years. The deal, which has yet to be finalized, also was said to include a tweak to the credit that would allow projects that started construction, rather than completed ones, to receive it.
The solar industry “no longer needs subsidies to survive,” Berger argued in his letter to the Senate Finance Committee and House Ways and Means Committee.
“We do not believe an extension of this credit is necessary for the continued health of the solar industry,” he said. “In fact, quite the opposite is true. If the credit is allowed to step down as planned, the industry will remain more robust in both the long and short term.”
Dan Whitten, a spokesman for the Solar Energy Industries Association, a Washington trade group representing companies such as Vivint Solar Inc., BrightSource Energy Inc. and SunEdison Inc., said Sunnova's board of directors' “deep financial ties to the fossil fuel industry” may have something to do with their position.
The company's board of directors includes David Kinder and Richard Morgan, executives of Houston-based pipeline giant Kinder Morgan Inc., former ExxonMobil executive Richard A. Rabinow, and others with links to the oil and gas industry.
“The ITC has helped launch an American innovation success story,” Whitten said in an e-mail to Bloomberg BNA. “If they don't want to claim the credit, they don't have to.”
Berger, in an interview with Bloomberg BNA, dismissed the claims that he has been motivated by fossil fuel interests as “silliness.”
“We are fully committed to the solar industry and making sure it is successful,” Berger said. “I’ve literally put everything I have into this” company.
While Berger said his company has benefited from the credit and plans to continue doing so while it's in effect, the industry instead should be focused on issues such as increasing access to the electricity grid and advances in battery storage, rather than hanging onto an eight-year-old tax credit.
“This is about moving on,” Berger said
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