1603 Investment Tax Credit (ITC) Grant-In-Lieu May Be Extended For Two Years Offering Critical Benefit To Solar Farm Investment

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Within the American Market in 2011, solar farm project demand may be anticipated to attain 1750MW influenced by the utility scale installations. Because of the 15% year in and year out decrease in solar panel price per watt, unsubsidized solar farm installation costs should drop to $5-$6/watt pertaining to non-commercial scale not to mention $3.75-$4 for utility level, and this ought to help drive the American market demand up 119% yoy in 2011 vs. 800mw in '10. Based mainly on newly released progress in energy policy legislation, Commercial Solar Design proposes greater likelihood connected with an extension of treasury hard cash grant-in-lieu of thirty percent investment tax credit (ITC), which in turn may well add appreciably to the upside of our estimate and enhance solar farm investment enormously.

Non-residential installs definitely will achieve an increased share of the U.S. photovoltaic market with 76% of the sector in 2011, up from sixty nine percent in 2010 (136% year in and year out). Due to the regulatory landscape, although the key wide-ranging energy reform bill has been taken off the table, a key "domestic manufacturing and energy jobs" bill presented in the US House of Representatives in the later part of July contained an extension for the cash grant-in-lieu for thirty percent ITC (investment tax credit) . Commercial Solar Design is now advising that there does exist a much higher probability of passage of the bill in congress once the Congress assembles after the August break. This specific bill is subsequently likely to end up being combined with the energy bill in the the House or might be connected to the tax extender's bill later on in 2010. As a whole, passage of alternative energy tax credit is high on the agenda of tax committees in the US Congress.

The discussion draft of "Domestic Manufacturing and Energy Jobs Act of 2010" unveiled around the last week of July confirms the fact that the extension for the hard cash grant program for 24 months is the key photovoltaic topic contained in the bill. That draft excludes the very much presumed global warming bill including "cap and trade" as well as a national Renewable Portfolio Standard (RPS). This watered down version of the "energy" bill is predicted to be approved in the US House of Representatives when United States Congress picks up following the August recess the week of September 13th. Nevertheless solar farm investment will be able to proceed because of reasonable internal rate of return (IRR) with or without the need of a 1603 extension

The Treasury cash grant-in-lieu of the thirty percent ITC (investment tax credit) program was developed in August '09 to offer an upfront real money grant equivalent to thirty percent of the applicable installation cost to the solar farm contractors and also developers and including commercial and utility size projects. A substantial majority of the contractors and developers don't have taxable profits make use of the thirty percent ITC, and thus, the cash grant program was obviously a tremendous incentive for the photovoltaic contractors/developers. When you consider that there seemed to be too little understanding around the taxability of the hard cash grant until late April the incentive ended up being underutilized.

This Treasury hard cash grant program has been a great financial success and extension of the program can provide significant benefit to solar farm investment and demand estimates in 2011.

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