In his inaugural address on January 20th, President Joseph R. Biden called on Americans to come together to overcome the many challenges we face as a nation. In the last couple of weeks, we have seen an extreme escalation of the divisiveness that confronts our enduring democracy. There is undoubtably work that needs to be done from Washington, D.C. to our neighborhoods to improve our nation. At the same time, as Biden noted, in many areas, there is more that unites us than divides us. And we have much common ground to build from.

Economic Relief Plus Solar Investment Tax Credit Extension

Solar investment provides a good example.

Late last year, the Republican-led Senate and Democratic-led House passed a new stimulus bill that was signed into law by former President Trump on December 27th. The new economic relief law released $900 billion in stimulus that includes, among other things, direct payments, unemployment benefits, support for vaccine distribution, and as you are very familiar with, a new round of PPP funding.

It also features an extension of the Solar Investment Tax Credit, as detailed in the following table (for commercial solar projects that begin construction in each year):

Table 1. Old and New Solar Investment Tax Credit Schedule for Commercial Solar Projects

Stable Horizon for Solar Tax Equity Investing

The Solar Investment Tax Credit extension came as surprise to many solar industry pundits, but all agree that it will accelerate the growth of community-based solar and the related investment opportunity for the solar tax equity investing for years to come.

“A two-year extension is a much better outcome than the industry had expected. It will provide significant upside to solar growth in 2022 through 2025.”
- Ravi Manghani, Head of Solar Research for Wood Mackenzie.

While Sunwealth and our solar installer partners had already started construction on much of our 2021 pipeline in late 2020, locking in a 26% tax credit under the old schedule, the extension increases the amount of Solar Tax Equity Investment available for our projects that will start construction later in 2021 and beyond. The extension provides a robust and long-term horizon for community-based solar tax equity investing with investor partners.

Extension Demonstrates Deep and Wide Bipartisan Support

It should not come as a surprise that solar can garner bipartisan support in even the most partisan environment. Every day, we work with experienced local solar businesses to build solar projects that are additive to our communities. They create jobs that pay well, energy savings, clean energy, resilience and local pride. This is true not only for projects in more established solar markets like New England and New York, but also for solar projects across the country, from Arizona to West Virginia and North Carolina.

Sunwealth partnered with Eagle Solar & Light, a Durham-based installer, on a 144kW ground-mounted solar project for the Orange Water & Sewer Authority (OWASA) in Chapel Hill, NC. The project will provide the municipality with $141K in lifeti… — Sunwealth partnered with Eagle Solar & Light, a Durham-based installer, on a 144kW ground-mounted solar project for the Orange Water & Sewer Authority (OWASA) in Chapel Hill, NC. The project will provide the municipality with $141K in lifetime energy savings.

Bipartisan support for solar in Washington, D.C. gets fortified by ubiquitous bipartisan local leadership. A bipartisan coalition of hundreds of Mayors from “Tacoma WA to Ft. Lauderdale, FL” advocated for the extension of the Solar Investment Tax Credit. These Mayors see the tax credit as critical for both the climate fight and local economic development. Massachusetts is well represented by the Mayors of Attleboro, Lawrence, Holyoke, New Bedford, and Newton, among others. The coalition continues to grow and become more vocal.

American as Apple Pie

Community-based solar is becoming as American as apple pie. There has never been a more compelling and predictable community-based solar market and related solar tax equity investing opportunity. As President Biden noted in his inaugural address, the new administration and Congress have many pressing issues to focus on to get our country back on track over the next few months. The recent extension of the tax credit creates space for these other issues to take center stage over the first 100 days. Nonetheless, we look forward to what the Biden-Harris administration and the new Congress will continue to do to support the “climate fight and local economic development.” As a new day dawns in America, the forecast is good.

Our solar installation with 127 Energy and CTEC Solar on the roof of the Whole Foods Market in Melrose, MA delivers clean power to an energy intensive business.

Jon Abe is Chief Executive Officer at Sunwealth. He has over 20 years of experience developing, building and managing solar and distributed energy resources and working with community banks to finance the growing solar economy. Jon also is proud to help green and electrify his community as a member of the Belmont Light Advisory Board.