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Solar News

Congress Active in Promoting Community Solar Energy


Although there has been little to no movement on the energy bill in the Senate--you may remember the hopeful stories about   the American Clean Energy and Security Act of 2009 when it was barely passed in the House in June 2009--two Congressmen have introduced legislation to spur solar energy projects. Although small in scope, these initiatives are aimed at promoting the installation of community-based solar power systems.

On March 17, Senator Mark Udall of Colorado announced the Solar Uniting Neighborhoods (SUN) Act of 2010. The central purpose of the legislation would be to increase clean energy jobs by promoting small-scale solar installations. Current federal tax laws allow homeowners to take a 30% income tax credit for photovoltaic solar panels installed on their homes. Those that invest in community-based photovoltaic installations however, are not eligible for the tax credit. The purpose of the SUN Act would be to modernize the tax code and make individuals that invest in community solar energy projects eligible for the 30% federal tax credit. According to Senator Udall, "By eliminating the requirement that the solar panel be on one individual's property, it frees Americans to work together on community projects where each individual can claim a tax credit on part of a shared project will."

A report by CleanTecnica claims that the legislation would be particularly beneficial for those interested in investing in solar energy but cannot because they live in an apartment or are unable to afford the substantial up-front cost. Paul Spencer of the Clean Energy Collective hopes that Senator Udall's plan will spur solar energy projects across the nation: "The community-based clean energy model has the potential to be the vehicle, which spurs widespread adoption of clean energy and puts us well on our way to a long-term, sustainable, clean energy nation."

While Senator Udall introduced the SUN Act in the Senate, Congresswoman Gabrielle Giffords of Arizona proposed a different approach to promote the development of small-scale solar installations in the House of Representatives. On March 31, Representative Giffords announced the Solar Schools Act which is aimed to help school districts install solar panels at their facilities. According to a press release from the congresswoman's website,

Currently government institutions, such as school districts, can develop solar energy in one of two ways: through an agreement with a solar installer who maintains ownership of the panels and who can claim an investment tax credit, or by financing the purchase of the solar system through tax-exempt bonds.

If school districts were able to combine both approaches, financing a solar installation through tax exempt bonds and claiming the investment tax credit, it would make clean renewable energy much more affordable.

The Solar Schools Act would allow schools to use proceeds from tax-exempt bonds to enter into pre-paid contracts for renewable energy. Publically owned utilities already are granted just such an exemption to enter into similar contracting agreements. The Act would extend that exemption to local government entities.

The SUN Act and the Solar Schools Act are different approaches to accomplish a similar objective: more community based solar energy projects.