In an unexpected show of reason and bipartisanship the U.S. congress renewed federal tax credits for investments in wind and solar power for 5 years. The surprise extension will lead the the installation of 20 additional gigawatts of solar power over the next 5 years, more than had been installed up to 2015 according to Bloomberg New Energy Finance. The wind credit will create an additional 19 gigawatts. The 39 gigawatts total will fully power 8 million homes. This extension will have a bigger impact than the Paris agreement in the U.S. for the next 5 years, and it will ensure that the U.S. is able to meet its commitment to slash greenhouse gas emissions. The tax credit extension is critically important because it will be an economic bridge to the time that solar and wind power are cheaper than fossil fuel power without a carbon tax.
"This is massive," said Ethan Zindler, head of U.S. policy analysis at BNEF. In the short term, the deal will speed up the shift from fossil fuels more than the global climate deal struck this month in Paris and more than Barack Obama's Clean Power Plan that regulates coal plants, Zindler said.
Politically this is huge news because it shows that renewable energy is so popular across America that powerful special interests such as the Koch Brothers do not have the power to break the bipartisan support for wind and solar power. From the farms of Iowa, to the hills of Texas and the deserts of the southwest, wind and solar power have become engines of economic and job growth. Oil may boom and bust from the Dakotas to the Texas plains but the wind is free and the sun keeps on shining. The steady jobs from managing and maintaining wind and solar systems will build healthy communities not subject to the disruptive effects of boom and bust cycles.
This tax credit extension is port of a larger budget deal reached by Democratic and Republican leaders late Tuesday that is expected to be voted on by the end of the week. See Bloomberg news for more details.