For the eighth time, the Senate failed to pass legislation that would extend the Investment Tax Credits beyond their end of year expiration dates.
The ITCs are vital to the solar energy industry in the United States. Many solar projects across the country are on hold until this leglislation is sorted out. Large scale solar power projects could be nearly non-existent in the short-term in the US without the 30% tax credit.
First Solar (FSLR), the solar power company best positioned to capitalise on the US utility market even without the ITCs, said in their earnings call yesterday that they have to continue to focus on Europe if the legislation is not passed. The failure of this bill to pass would be a significant negative for SunPower (SPWR) as well.
Who supports the ITCs?
- all the state governors (except Georgia)
- a coalition of Fortune 500 companies
- Wall Street banks
- renewable energy startups
- tech giants like Google (GOOG), Hewlett-Packard (HPQ) and Applied Materials (AMAT)
- utilities like PG&E (PCG) and Edison International (EIX)
- financiers such as GE Energy Financial Services
An eight-year extension is being pushed for, but it is possible a one-year extension may be pushed through as a compromise. The Republicans are blocking the legislation because they claim it raises taxes. Neither Barack Obama or John McCain were at the vote.
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