End is Near for Solar Tax Credit

Solar companies in the Bay Area are asking Congress to extend a popular renewable energy tax program that expires at the end of the year.

Craig Miller/Climate Watch

The 1603 program reimburses companies for a portion of the cost of installing solar projects.

Solar companies benefit from a 30 percent tax credit, but there’s a problem: most companies developing solar projects don’t have enough income to take the deduction. That’s where the 1603 treasury grant program comes in. It gives companies a cash grant up front in place of the tax credit.

“This program really was a fix that brought liquidity back to the market and enabled developers to move forward with their projects,” said Arno Harris, the CEO of Recurrent Energy, a San Francisco-based solar developer. “It’s definitely going to have an impact, if it’s not extended, on our appetite to continue investing in the US solar market.”

According to Harris, most solar companies depend on the tax program. But he says there is some good news (at least for his company). Solar is looking more attractive to investors, including Google, for one, which recently announced it’s investing $94 million in four of Recurrent’s solar projects.

Hear Lauren Sommer’s radio story on KQED News.