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[Page: E1108]  GPO's PDF
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• Mrs. DAVIS of California. Mr. Speaker, I would invite you to join me as a co-sponsor of the Renewable Energy Act for Credit on Taxes.

• This is a refundable tax credit to be given for investments in renewable energy systems based on solar, wind , or fuel cells providing up to $4.50 per Watt of electricity produced, capped at the lesser of 35 percent of the cost of the system or $6,000 for residences and $50,000 for commercial enterprises. It would sunset in four years.

• A recent ABC poll showed that 90 percent of the public support increased investment in renewable energy sources. In its National Energy Policy, the administration has also identified this need.

• Based on the California experience, we need to supply more energy at peak periods as soon as possible. Because of transmission gridlock both between states in the western region and within California, right now we need to increase supplies where they will be used. Public policy calls for increasing reliance on renewable energy sources.

• Therefore, we need to give incentives to power sources that can be put into operation relatively quickly, produce power at peak times where it will be used, and be powered by renewable energy sources.

  [Page: E1109]  GPO's PDF

• The administration's National Energy Policy states, ``Photovoltaic solar distributed energy is a particularly valuable energy generation source during times of peak use of power.'' [p. 6-10]

• Under-used locations for increased production of power are homes and businesses. Owners have not invested in personal energy systems in part because they have not provided a reasonable return on the investment. This gap can be bridged by using tax

• Solar power for water heating has been used extensively in the West over many years because it has been a good investment. It demonstrates the willingness of owners to make this investment when it is financially viable.

• Newer materials and more reliable systems have become available to make individual photovoltaic systems attractive as well. In April a solar demonstration home was built on the Washington Mall that not only incorporated many energy saving designs but also employed a solar energy system with back-up batteries. The additional cost for the solar system for this large, three-bedroom, two story home was given as $30,000.

• Is a federal tax credit enough to encourage a homeowner to make this investment? Under my bill the owner would qualify for $18,000 of the cost based on the amount of power produced; however, the proposed cap would be the lesser of 35 percent of the cost or $6,000, leaving $24,000 of uncovered cost.

• While this might not be a sufficient incentive for many owners, some 14 states as well as about 26 municipalities have additional rebates. California, for example, has a rebate program capped at 50 percent of the cost. In this case, the California homeowner combining the two programs would be paying only $9,000 of that cost.

• Without a rebate, a homeowner could buy a system of half the capacity receiving a lower rebate but still have a $9,750 net cost under this bill.

• The advantage of a solar solution is that in many locations the solar energy is most available when it is most needed--in the summer in the middle of the day.

• In other areas wind systems are viable with applications that look like a typical roof top vent suitable for residences and businesses. While there is a current production tax credit for wind energy , it is not an attractive financial incentive for individuals since the owner is using the product not selling it. Thus, a tax credit is the appropriate mechanism.

• I have chosen a refundable tax credit rather than a grant program as less bureaucratic and readily accessible to a taxpayer. The sunset will give incentives to immediately increase supplies.

• I believe it is time to take a large stride toward investing in renewable energy that will continue to produce power for many years without needing to purchase fossil fuels. We can have more clean power where we need it at peak periods.
  

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