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21 May 2010

Tax breaks for solar firms could create 200,000 US jobs

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Solar Energy Industry Association predicts extension of tax credits and cash grants for solar firms would deliver a net boost to the US Treasury

The solar industry has thisd week stepped up its lobbying for the extension of a cash grant for solar projects and new tax breaks for equipment manufacturers, claiming that over 200,000 green jobs could be created.

Launched as part of the US stimulus package in early 2009, the Treasury Grant Program (TGP), gave a cash grant in lieu of a tax credit to solar project owners.

However, the grant is due to expire this December, raising fears that the recent boom in solar energy projects in the US could be derailed.

The Solar Energy Industry Association (SEIA) this week published a report suggesting that extending the scheme by two years to include projects with a construction commencement date before the end of 2012 would boost investment in solar projects by $21bn between 2010 and 2016, creating another 67,000 jobs by 2015.

The Association is also recommending that solar equipment producers be made eligible for a new manufacturing investment tax credit (MITC). The tax credits for renewable equipment manufacturers were originally launched alongside the TGP scheme, but to date solar equipment firms have not been covered by the credits. Including solar manufacturers would bring in another $22bn investment for the solar sector, according to the SEIA, creating 158,000 jobs by 2016.

Combining the two measures to create a third scenario would create $48bn in extra investment for the solar industry, and create 207,000 jobs in 2016, the SEIA predicted in its report.

The US government is currently looking at ways to address its looming budget deficit, but the SEIA argued that its proposed incentives would actually deliver a net boost to tax revenues over the next five years.

"When comparing 2010 and 2016 in terms of government stimulus, increased employment and the unemployment alternative we find that in five years the saved unemployment benefits and additional tax revenue are higher than the government stimulus for all three scenarios," the report concluded.


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