Renewable energy pundits heaved a huge sigh of relief yesterday, as Congress agreed to extend solar and wind investment tax credits for an additional five years. The credits were initially set to expire in 2016, which had caused concerns about the immediate future of the clean energy industry in the United States. Now, the five-year extension is expected to create a $73 billion boom in clean energy projects. The full impact of this decision can only be described by one word: massive.
Extending the tax credits will result in the installation of an extra 20 gigawatts of solar power. That’s more than every panel ever installed in the U.S. prior to 2015, according to Bloomberg New Energy Finance (BNEF). Where wind power is concerned, 19 gigawatts are expected to be added over the lifetime of the tax credit. Altogether, the five-year extension will inspire over $73 billion in clean energy investments, with the new installations generating enough electricity to power 8 million homes. That’s not enough to make Elon Musk’s dream of country run on 100-percent renewable energy come true, but it’s a pretty big step forward.
Related: Obama just rolled out the biggest energy efficiency rule in U.S. history
Although the prices for solar and wind power technology have been dropping over the past several years, fossil fuels are still – by and large – a great deal cheaper. The tax credit was initially created as an attempt to level the playing field and encourage more consumers to install renewable energy sources. Prior to this announcement, energy experts feared the expiration of the tax credit could hinder growth, particularly for smaller rooftop solar power systems.
Following the news of the Energy Department’s new efficiency regulations for commercial heating and cooling, it’s safe to say the Obama administration is coming out of the gate strong after the signing of the international climate accord in Paris, just under a week ago. Eager to leave a lasting legacy as an advocate of clean energy, we’re likely to see more pro-environment legislation come during Obama’s remaining months in office.
Images via Shutterstock and Bloomberg New Energy Finance