When Congress passed a five-year extension of the Solar Investment Tax Credit last year, it gave Texans an opportunity to make an investment in renewable energy that can help create well-paying jobs and maintain our energy security — all while keeping tax dollars in Texas.
The incentive is simple: If you install an Energy Star-approved solar power system before the end of 2019, you'll get a 30 percent tax credit for that year; between 2019 and 2022, that credit gradually decreases to 10 percent. This applies to homeowners, businesses and even those who participate in community solar projects, meaning potentially hundreds of millions of dollars that would go to the IRS will instead stay in the state.
Even our cities and electric cooperatives can make use of this. Power purchase agreements are opening up low-cost energy for municipal utilities and places such as Fort Hood, which just broke ground on a multi-megawatt field. U.S. Rep. John Carter said at the groundbreaking that the money that would have otherwise been spent on installation electric bills could now go toward military training.
The same could also hold true for our cities, as power purchase agreements bring the possibility of competitive electricity prices that don't use nonrenewable resources. This frees funds for other growing social needs and community investment. Georgetown recognized that potential with its all-solar-and-wind PPA; the rest of Texas can do the same.
Solar is important for Texas energy security. Natural gas – our primary determinant of Texas electricity prices – is likely near the bottom after another volatile price ride, but a look back at the last decade of gas prices should help us realize that our now 48 percent reliance on it to generate ERCOT electricity could eventually be a burden we should have mitigated. Meanwhile, the price of a photon is always $0, and oil and gas workers left hurting by the recent downturn have the opportunity to join one of the state's fastest-growing industries by working in solar.
Just as ultra-low oil and gas prices have nearly halved severance taxes into the state’s General Fund, we know that rising electricity prices take dollars out of our family and business “General Funds.” We should prepare for this by further diversifying our electric generation mix.
I propose lawmakers set a goal of having solar serve 1 million Texas rooftops, ranch fields and farm buildings and 50 percent of state electric cooperatives by the time the tax credit phases out in 2022.
Getting to this goal will require smart policy, the most important of which will be helping lower the price of entry into renewable energy. For example, the USDA's Rural Energy for America Program provides 25 percent grants and low-cost 75 percent loans for renewable energy projects. The USDA even has a program that provides revolving loans to electric cooperatives so they can offer low-cost loans and “on-bill” financing for their members to install solar and other renewable energy projects.
Texas has the potential to become the greatest “solar state” in the nation. Let’s take advantage of the extended 30 percent tax credit. It’s good for all of Texas.
Disclosure: Howard Arey has been a donor to The Texas Tribune. A complete list of Tribune donors and sponsors can be viewed here.