The outlook for renewable energies is strong in the coming year, with people taking advantage of tax credits and rebates that make residential and commercial investments alike look attractive. But as the government changes hands on both the federal and state level, developers are keeping a keen eye on those incentives that could make or break their business.
Coming off his best year ever, and going into the year with jobs lined up through the middle of 2017, solar installer Greg Blake should be nothing but optimistic about the growth of South Pack Solar in Peterborough. But Blake said he has concerns.
“I think we’re looking toward some unsettled times,” said Blake. “Right now, things seem very steady, but we do have that uncertainty.”
Blake, who mainly installs residential solar systems in and around the Monadnock region, said that in 2016, his revenue was up 25 percent compared to the prior year, and based on jobs already done or lined up for 2017, this year looks to be on par with that.
But because most of his business is residential, and arrays can cost between $8,000 and $20,000, most of his customers are reliant upon tax credits and rebate incentives through the Public Utilities Commission to make their installations a reality.
For example, a person installing a $15,000 array on their roof would likely get a tax credit of around $5,000 and a rebate of about $2,500, said Blake – recouping about half of their initial outlay in the first year.
“It’s a huge incentive,” said Blake, of the tax credit and rebate. “Not everyone has that kind of disposable income, and even for those that do have the income, it certainly tips the scale.”
The tax credit is federal, and though the incoming Trump administration is heavily friendly to coal, oil and natural gas, that credit has already been extended through 2021 – although the amount decreases the further out you go.
Through 2019, the credit remains at 30 percent of the cost of the system. In 2020, that number drops to 26 percent, and in 2021 to 22 percent, with a 10 percent deduction from 2022 onward.
Trump has promised a loosening of the Environmental Protection Agency and to abolish the Clean Power Plan, and the Paris Climate Accords, and has denied that climate change is a man-made problem, leading solar energy suppliers such as Blake to worry about the future of clean energy incentives, though Trump has made no specific claims about the future of the tax credit either way. Trump has also suggested that he’s welcoming to all energy sources, especially those produced in America, although his energy plan seems to heavily favor fossil fuel energy.
On the state side, incoming Gov. Chris Sununu has been a lone dissenting vote on several large solar projects in the state – including Peterborough’s solar array – saying they weren’t the best financial deal for the state, He has also said he would look at raising or abolishing the net metering cap, which limits how much excess energy a producing solar array can sell back into the energy grid. Raising that cap increases the return of investment for solar, and can make it more attractive to homeowners.
As solar panels on rooftops becomes a more common sight, Antrim Wind Energy plans to break ground this year to put up nine commercial wind turbines on the Tuttle Hill and Willard Mountain ridge.
Wind energy production is subject to the same kinds of tax credits as solar to make it attractive to investors – in fact, they are under the same exact tax credit legislation. And wind energy production has historically relied upon these tax incentives, with production often all but halting when tax credits failed to renew.
But, like solar, wind, too, has some stability until 2020 due to extensions of certain tax credits – in particular the production tax credit, which gives wind developers a 2.2 cent per kilowatt-hour benefit for the first 10 years of a renewable energy facility’s operation.