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Run on Sun Monthly Newsletter

Solar Economics Heading into 2011:
Part 1 - Tax Policy

2010 is winding down which calls for the inevitable rounds of backward-looking assessments and forward-looking projections. At Run on Sun we are more geared toward looking forward so I would like to take note of some recent developments that should have positive economic impacts on the solar industry in the coming year. There's lots to talk about here, particularly regarding tax developments and solar rebate levels (see next story).

The federal Investment Tax Credit for Solar Power Systems allows residential and commercial customers to apply 30% of the cost of their solar power system as a credit on their federal income taxes. This credit, which is in place until 2016, is very popular but for larger projects is was somewhat limited by the "tax appetite" of the project owner. Put simply, if the owner did not have that great a tax liability, the credit could not be fully utilized.

As a result, the "Stimulus" bill of 2009 introduced the most successful tax policy of the past two years - the Solar Treasury Grant Program which allowed owners of commercial systems to receive a grant for 30% of the cost of their solar power system directly from the Treasury without consideration of the owner's tax situation. The Grant program (also known as the Section 1603 program for its provision in the tax code) was set to expire at the end of the year. In one of the more welcome consequences of the just-passed Tax-Cut deal, the Solar Treasury Grant Program will be extended for another year. That means that commercial solar systems that are substantially completed in 2011 will be able to apply for a 30% grant (less the value of any applicable utility rebates) and receive the payment in the form of a check from the Treasury instead of a credit (that they may or may not be able to use) on their next year's taxes. According to SEIA President Rhone Resch, "An extension [of the Grant program] will help the solar industry remain one of the fastest growing industries in America and create thousands of new careers. We now urge President Obama to swiftly sign this bill into law and keep solar working for America in 2011 and beyond."

Another favorable tax policy that has been in place for solar also got improved by the new Tax-Cut deal. Commercial owners of solar power systems are presently allowed an accelerated depreciation schedule, taking 50% in the first tax year following installation, with the remaining 50% to be depreciated in equal amounts over the following four years. The new legislation improves on that program by allowing 100% to be depreciated in the first year.

Collectively, these measures should help spur new commercial installations through 2011, and when combined with the generally improving economy and the overwhelming value represented by commercial solar power systems, 2011 should be a very good year for commercial solar.

While the information in this article is believed to be accurate as of the time it was written, Run on Sun cannot, and does not, provide tax advice. As always, please consult your tax advisor for specific guidance as to how any of these benefits might apply to your tax situation.

Solar Economics Heading into 2011:
Part 2 - Rebates

One of the most important factors in the growth of the local solar industry has been the availability of utility-based rebates for solar power installations. This year has seen a lot of developments in this area, and unlike the tax arena where the news is all good, the simple, sad truth is that rebates are declining throughout Southern California, with some utilities suspending their rebates altogether and others threatening to do so.

Will the defeat of Prop 23, assuring that AB 32 will go into effect after all, mean that there will be additional funds injected into solar rebates? Will a feed-in tariff finally take hold in California? And where are rebates now, anyhow?

We have a comprehensive round-up of solar rebates for each of the following utilities: SCE, LADWP, BWP, GWP and our own PWP.
Read the full article here.

From the Solar Kid: Eating Green in the New Year

As the new year begins - 2011 - I shall tell a tale of three grocery stores and my adventures buying food inside them.

Grocery Store A was the most common type of grocery store. The fruits and vegetables did have labels stating where they had come from, but they were small and easy to miss. I needed garlic so I went to Grocery Store A to buy some. When I got there, I read the label to find the garlic's origin. The garlic came from China, yet I live in California, which houses the garlic capital of the world: Gilroy. Why would Grocery Store A sell garlic from China when the plant is grown much closer, in California? China is many times farther away! It didn't make sense. Later looking through the produce section, I found that the vast majority of the fruits and vegetables where not from California or even from within the country. What was from California did not have any special marking to let the buyer know that he or she was reducing his or her carbon footprint.

I would later go into Grocery Store B. When I went into the produce section, an ostentatious banner proclaimed, "Get local food here!" I noted the special emphasis on the word "local" and thought that it was a good thing that this store had taken the initiative to get food from local farms. My good feeling was soon dashed when I read the label on the grapes. "From California and Chile," it read. Wait...what? Again I was confused. Why would Grocery Store B buy grapes from both California and Chile? Why not just from California, famous for grapes (and vineyards)? Glancing around, I could see that other labels said the same sort of thing, using California's name first and another agricultural center's name too. Was Grocery Store B buying most of the grapes from Chile and a few from California just so it could declare itself "local"? How would a consumer know where what he or she was buying came from?

Finally, I strolled into Grocery Store C. Again I saw banners professing the same thing as in Grocery Store B: "We're local!" I frowned. After my previous experiences I had no reason to believe that fruits and vegetables were really local, as advertised. I stalked over to the produce section to have a look. To my surprise and intense delight, I found "local" stickers on more than half of the produce. On each label with a "local" sticker, it said, "From California," and nothing more. Grocery Store C let the buyer, me, know the origins of the food I was buying and allowed me to make a choice.

The End.

...Or is it?

If you think back to the best green thing you can do, it said practice your geography. Go ahead and reread it so you can remember why you should do that. Some, but not all, grocery stores make sure that buyers have the choice to buy locally. If you can, remember (or remind your parents!) to be conscious of where your produce comes from. The less distance food has to travel, the less fossil fuel it uses up. It's that simple. If your grocery store does not label the origins of its produce or if it does not make it easily visible or easy to understand, try talking to the manager of the store about it. Ask him or her to buy closer to home. Explain why you think the store should change. You can make a difference where you live.

And that is our New Year's Resolution:

Buy locally.

Happy New Year!