Companies of all kinds in the solar industry are eyeing the upcoming vote for the investment tax credit (ITC) extension which would extend the 30% tax credit for solar developments and projects for 8 more years through 2016. If the ITC is not renewed, the credit would decrease to 10% and many planned photovoltaic and solar thermal projects would be suspended or terminated. One of note is the huge 280MW parabolic trough solar thermal plant in Arizona by Spanish solar company Abengoa. Fred Morse, Abengoa´s US senior advisor, has already confirmed that Abengoa will not build the solar thermal plant on the proposed 3 acre site in Gila Bend, Arizona if the ITC is not extended. This would be a major hit to the advancement of rewnewable energy advancement in the US, and many solar companies claim they will simply take their projects into other parts of the world where tax incentives are more favorable to the solar industry.
Look for solar stocks to fluctuate a lot up until this vote. Since the tax credit expires at the end of the year, the longer the ITC renewal is delayed, the less likely something will get done. Solar stocks will rocket up if the ITC is renewed and they will drop like a rock if it is not renewed. Looking long term though into 2009, there is still a chance that the ITC will get renewed in some form after we have a new president in the US, and the government starts to realize that the US will not be a leader in solar technology if the tax credit is not renewed. With energy prices being high, the US should make sure they are at the forefront of renewable energy; solar seems to have much less of a tarnished imagine compared to its sister renewable source, ethanol.