So Close, Yet So Far
Pennsylvania's Solar Rebate Program
In July, the Pennsylvania Legislature passed, and Governor Rendell signed, the Pennsylvania Alternative Energy Investment Act, providing $650 million in funding authorization and tax credits for alternative energy and conservation. So where is the money? It's coming.

The $650 million authorization includes two set-asides for solar; $100 million for supporting the installation of solar energy technology and another $80 million for solar-related alternative energy production projects.

The $100 million is being administered by the PA DEP. The Act provides the administrators with much latitude in determining funding levels and eligibility, and it now appears that these funds will be allocated as cash rebates for residential and small commercial projects. Eos founder Andrew Kleeman is a part of the Governor's Solar Workgroup, working with the PA DEP toward implementation. Very few details have been finalized, but it currently appears that the rebate levels will be less than the 35% of cost maximum allowed by the Act - in part as a response to the terrific cost offsets created by the federal ITC extension.

The PA DEP has expressed no guidance on actual rebate levels, but our current "best guess" at Eos is rebate levels in the $2.00 per watt range. The rebate program is also likely to be structured with decreasing rebate amounts, either over time, or as certain thresholds of installations are completed. The PA DEP staff continues to work through the details, but we do not expect to see final regulations promulgated prior to January 2009. The website of the Office of Energy and Technology Deployment of the PA DEP may contain details as they become available.

The other $80 million is being administered by the PA DCED. The target use of these funds is even more ambiguous, at this time. It is likely that some of the funds will be used as inducements for new solar manufacturing, but Eos also expects some of those funds to be available for cost offsets at larger commercial projects. We do not expect to see final regulations for the $80 million until January 2009, at best. The DCED website may contain details as they become available.

A terrific summary of the Act's other provisions, as well as related news can be found in PennFuture's November Green Power Update. (Read the summary)

Eos will release a newsletter with details within 48 hours of them becoming available. Solar rebates are coming to PA. Finally!

The October Surprise
Solar ITC Extended
Eight at-bats, eight strikeouts in 2008, but Congress finally hit the ball squarely for an extension of the Solar Investment Tax Credit in October. The Emergency Economic Stabilization Act of 2008 (aka "the Bail Out") incorporated several renewable energy financial incentives, at the last minute. Extension and improvement of the Solar Investment Tax Credit (ITC) was, finally, among these incentives. The new solar ITC provisions will:

• Extend for eight years the 30 percent tax credit for both residential and commercial solar installations;
• Eliminate the $2,000 monetary cap for residential solar electric installations, creating a true 30 percent tax credit
• Allow the ITC to be taken against the Alternative Minimum Tax (AMT) for both businesses and individuals

The ITC extension did not include re-authorization of the "bonus" depreciation for solar that was available to businesses, but the accelerated five year depreciation for solar remains in effect. Nonetheless, overall, the ITC extension is a home run that sustains the tax advantages Eos has modeled for its commercial customers, and greatly enhances the financial performance for Eos' residential customers. If you are already an Eos residential customer with a pending project, we will be sending you an updated financial pro forma, based on the new ITC.