The ITC Extension. It wasn’t entirely expected to happen at this point in time but the ITC is likely to be extended for 2 years in a vote later today. The cliff from 26% to 22% will wait until the end of 2022 and 22% will stay through 2023. This will give large scale developers flexibility with placed in service procedures and safe harbor for all tax equity based structures. It also gives the industry another 2 years to get its act together and fight for a longer extension or even the ability to make the ITC permanent. Permanent may seem impossible but alcohol excise breaks were made permanent in today’s extender package. As of this moment, the actual bill language hasn’t been filed yet. We’ll update you when we see it.
The Policy Pros. Over the past two years the solar industry has figured out that policy is not a sometimes thing and always a full contact sport, spectators need not apply. You met with your representatives on the hill and in their district, educating them about your business, solar and the jobs you’ve created. SEIA worked both sides of the aisle, relentlessly and sometimes with folks, myself included, questioning whether that was the right way to play it. State trade groups worked to ensure that solar expanded within their area and governors were in tune with the policies in DC that ensure jobs are created in their state. CALSSA, for example, worked with members and their customers like schools and farmers to lobby for federal policies like the ITC with members of Congress. And environmental groups, not always kind to solar, have started to recognize that the ITC helps ensure that the energy transition is not only wise for the planet but for consumers’ pocketbooks as well. At the end of the day it was a team effort, congrats to everyone that spends their work fighting the good fight.
A Win Is Good Business. The ITC extension is the second best way to show that policy is business development. Second only to local net metering and interconnection rules for solar. Imagine if instead of lobbying, policy efforts had a price tag. Hypothetically, how much would you have paid to guarantee for the ITC extension to happen or that the net metering policy you have currently were kept in place? Like anything related to business development, there is no guarantees in life but you have to take the shot in order to make it. Policy is no different and if you want policies to change or remain the same so your business prospers, you have to change your sentiment. If I call or email you to ask you to join CALSSA, I’m not asking you to do so as an act of charity, I do it because California is the largest solar market in America and where good policies tend to start. Same is true for the team at SEIA and your state chapter. 1% is the number you should think about in my mind and I grant you that $200k for a $20million revenue business seems too high, but what if the most important regulation in your market changed for the worse? What if it got better? In the coming weeks I am going to ask leaders of trade groups to tell us what they would reasonably expect to accomplish if their market put 1% towards policy and share those notes with you.
Market Call Recap. You can catch our market update webinar replay for the next few days here. Make sure to listen to my call to action at the end. I appreciate Phil from Roth including me in the conversation.
Giving Week. Over the next week and a half, for the days that I publish, I’ll share with you one group that is deserving of $10 of your hard earned money. The ask will be $10 each time for a total of $50, it’ll be a good cause and some will be tax deductible. Today it’s Vote Solar. When it comes to nuance and wonky regulations, Vote Solar thrives. Adam and his team play the long game, getting involved in dockets requesting a new natural gas plant because anytime a monopoly wants something, they’re willing to give something and Vote Solar fights to get solar’s piece. Donate to Vote Solar here.
Housekeeping. Today and tomorrow you will get your typical daily newsletter. Afterwards, it will really depend on how much solar news is being made so it is possible and even likely that things will be sporadic between now and January 4th when we return to business as usual.
Opinion
Best, Yann
