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Solar Tax Credit Extension is Included in the Covid-19 Relief Bill

We are thrilled to announce the Extension of the 26% Solar Investment Tax Credit!  

The United States federal spending and tax extension package was passed by congress alongside the $900 Billion Covid Relief package last week and signed into law by the President on Sunday night. This package will bring huge relief to Americans who are struggling in the face of the pandemic. It also includes several critical extensions to the solar investment tax credit (ITC).  

What This Mean for Solar Shoppers and Customers 

The ITC dropped from 30% to 26% in January of 2020. The solar industry has been bracing for another step down in the (quickly approaching) new year. Just a few days away from the end of the year – solar shoppers who have not yet gone solar, or have not had their project installed–  have more time! 

With the Extension outlined in the stimulus bill, solar buyers will receive 26% back from their system’s full turnkey cost if installed before the end of 2022. So, solar projects constructed in 2020, 2021, or 2022 are now eligible for the full 26% ITC.  

Solar projects constructed in 2023 will be eligible for a 22% tax credits. After 2023, there will be no tax credit for residential solar installations. Commercial-scale solar projects will be eligible for a 10% tax credit from 2024 onwards.  

Tax Credit Law – Locations  

  • Original code for residential solar properties can be found in Title 26 Section 25D of the U.S. Tax Code
  • Original code for commercial solar projects can be found under Title 26, section 48 
  • Extension language for residential solar can be found in the relief bill on page 4915 
  • Extension language for commercial solar can be found in the relief bill on page 4908  

Clean Energy Growth 

We are excited by the inclusion of so many renewable energies in the bill. The inclusion of solar energy and so many clean energy alternatives in this bill will certainly spur tremendous growth and clean energy investment for years to come.  

The solar tax credit has been the most significant stimulus for residential and commercial solar that the industry has seen. According to the Solar Energy Industries Association, since its implementation in 2006, the residential and commercial solar tax credit has helped the U.S. solar industry grow by more than 10,000 percent, with an average annual growth of 50% over the last decade alone.  

We expect to see solar industry professions keep their stance at the top of lists predicting job growth in the years to come. This Extension will undoubtedly help us deploy more solar energy more quickly across homes and businesses across the state of Ohio and beyond. Third Sun Solar and our partners across the country are excited to continue to deploy solar energy and supply a means of gainful employment to our communities in these times of economic hardship.  

 

To find out more about the Solar Investment Tax Credit, the Extension, and what it all means for your solar project, get in touch!  

 

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Santa Goes Solar: Case Study

All Santa & Mrs. Clause wanted for Christmas this year was to GO SOLAR. This holiday season Mr. & Mrs. Claus installed a 27.6 kW solar array at their personal home on the North Pole. They paired their solar purchase with the addition of four Tesla Powerwall’s to keep the Christmas lights lit and hot cocoa steaming hot when Northern Lights flash. These electric outbursts of solar particles often are the cause of grid failure at the North Pole.

Why Did Santa Go Solar?

This year Santa wanted to give a gift that could heal the world. And like a true Christmas Miracle, Ol’ Saint Nicholas discovered the wonders of Solar. He believed if he did his part in accelerating the shift to clean energy with a home solar installation, he really COULD begin to heal the world.

Like many folks, Kris Kringle has switched out all his holiday lights for LED’s. He knows that running lights year-round is an added household expense. “I’m not the Financial Manager at home,” Santa says with a Ho Ho Ho, “That’s my wife, Mrs. Claus.”

After undergoing a huge expansion of his personal holiday light display five years ago, which included the addition of an eleven-story fully lit Christmas Tree, the electricity bills began climbing. Mrs. Claus says: “I’ve been making a list of electric expenses and checking it twice. It was time that we started looking for an alternative to the way we’ve been doing things for the past hundred or so years. Of course, I will never get in the way of adding lights, candy cane machines, and additional tools in Santa’s home office. But when I saw the electricity rates begin to climb, I told Santa that we may need to look for alternatives.”

For Santa, his motivations for going solar were primarily environmental.

In the spirit of Christmas, Santa says that he’s most excited to comply with the Paris Climate Agreement. Santa recognizes his visibility and, as a public figure, is determined to comply with guidelines surrounding the reduction of greenhouse gas emissions and the advancement of sustainable energy.

“I used to abide by the old adage: “Naughty kids get coal, Nice kids get solar panels!” but over the years, I’ve come to realize the bigger picture – all kids get Solar Panels.

“This year we’re experiencing some changes. We are having to walk further and further to find a decent ice-skating rink. It is harder and harder to recruit reindeer to fly the sleigh. And on the big night when Santa Clause comes to town, in some places of the world the air quality is so poor Rudolph’s nose can’t shine so bright.”

It is important to start sending the message now to kids, Naughty or Nice – they’re going to need to be a part of the solution!

Solar Incentives

When asked about incentives, Santa said that the United States tax credits did not apply in the North Pole. But he is glad that the US Federal Tax Credit for solar will be available until the end of 2021. Speaking from experience Santa says: “Even without incentives, it is still worth going solar!”

The Solar Installation…

Santa can recognize a specialty when he sees one. The solar installers weren’t the first humans to visit Santa and the elves over the years, but they have been some of the few.

He said he thought about asking the elves to design, permit & install the system, but between their lack of expertise in anything outside of small toy electronics and the backlog of holiday toy-making – it was worth inviting humans up to the north pole to install the solar energy system professionally.

Santa chose REC solar panels for their high-efficiency, durability and 25-year product warranty. He was also quite pleased with the black-on-black design, which he knows his out-of-town guests will find quite attractive.

Always looking to the future…

“We’re excited to have an electric powered sleigh of the fleet this year. And to be delivering solar panels to homes across the world. It’s an honor to do my part in creating a brighter future.”

“And don’t think that up on the rooftop I don’t notice who is else is doing their part, Santa is always watching!” he said with a wink.

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20 Years of Back and 20 Years Forward, Solar in Ohio

20th Anniversary Celebrations Coming to a Close

2020 is just about over, which means that Third Sun Solar’s 20th Anniversary year is coming to a close. We have published blog posts, videos, photos and social media items all year long to illustrate our long and interesting history in the young and inspiring clean energy industry.

When Geoff and Michelle started Third Sun Solar in the year 2000, they had a dream to follow their passion for “right livelihood” – to start a business that aligned with their desire to prove that clean electricity production is possible, that environmental preservation and reducing pollution is imperative, and that there is an alternative to the status quo of buying electricity from large billion-dollar corporations.

From their first employee in 2002, to their current team of 35 and growing, the Greenfields have stood by those founding passions and inspired others to join them in the mission to Accelerate the Shift to Clean Energy. Third Sun Solar was one of the first in Ohio to build solar before net metering existed and when costs were over $10 a watt in the early 2000s. They have watched as costs have fallen over the years: $9 a watt in 2007, $7.5 a watt in 2010, below $4 by 2016, and now 2020 hovering around $3 a watt. With each drop in costs, solar has become more and more accessible to more of the population.

Business as a Force for Good

Third Sun Solar put its notion of “business as a force for good” as a public priority in 2012 when it became certified as a B Corporation – an expression of its commitment to not only being a profitable company, but also putting the planet and people on equal footing with monetary measures of success. The following year, 2013, the company hit the Inc. 5000 fastest-growing companies list for the 5th time in a row, proving that a company can do well by doing good.

In 2020, Solar Power World’s Top Solar Contractors listing ranked Third Sun Solar is the #1 solar installer in Ohio and #50 in the nation for lifetime kilowatts installed. With over $75 million in sales and more than 1200 projects installed, Third Sun is truly living out the founders’ dreams of proving that producing clean electricity from the sun is not only a possibility, but that it is a growing reality.

The momentum of 20 years of expertise and action is the foundation on which Third Sun stands poised and ready for the next 20 years.

Third Sun Solar’s long tenure in solar has given them a front seat on the “solar coaster”. They know what it means to ride the ups and downs of this emerging industry, subject to the changes in political will or lack thereof; issues of global supply and tariffs; and both lack of consumer knowledge and an emerging boom in solar awareness.

The next 20 years of solar and clean energy looks bright. 

The next 20 years of solar and clean energy looks bright. The industry has scaled to the point that costs are competitive with fossil fuel energy sources. It is no longer an environmental or an economic decision to go solar. It now makes sense on both counts. Soon, solar panels on homes, schools, businesses, and on rural farms will be as commonplace as air conditioning units or refrigerators are in our buildings. The market for solar power, while it has gone up and down over the last 20 years has been on a steady and consistent climb, with no indication of slowing the ascent.

As the solar coaster continues its upward ride, so will Third Sun Solar. In the unfolding of the next 20 years, expect to see the Third Sun team in more places around the region, making it even easier for people to take producing their own clean power into their own hands. There are exciting times ahead, for the company, the region, and the planet. The next 10 years have been called the “Solar Decade” and Third Sun Solar is ready to continue to be a force in the bright future of clean energy!

 

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The Biden Election and Clean Energy: What to Expect

By: Geoff Greenfield, Third Sun President, and co-founder

As the dust settles around the election many are asking: “What does the election mean for clean energy in general?” and “How will a Biden Presidency impact my own plans for going solar?”

 

As divisive as our recent politics have become, clean energy and concern about the climate remains popular with Americans on both sides of the aisles.    America is a technology focused society and many, including Wall Street, are very optimistic about the future of clean energy.  While Biden campaigned heavily on climate and his $1.7 Trillion “Biden Plan”, he is probably entering office with a divided congress, so our focus here is on what is likely and achievable in this scenario.

With control of both houses of Congress Biden and the Democrats will be able to enact more aggressive legislation.  In this case, with a VP vote as the tiebreaker in the Senate, the threat of a filibuster is very real.  This threat, combined with Biden’s pledge (and track record) of bipartisanship, we still expect a much more moderate agenda.  Compromise will dilute the full strength “Biden Plan” published during the campaign.  Given the speed of the legislative process, rulemaking, and court appeals, we expect that any version of a “Biden Plan Light” would not impact the solar marketplace until 2023 at the earliest.

Solar as part of COVID-19 Relief

Congress is currently working on a bill focused on the COVID-19 crisis and jumpstarting the economy. While there will be name-calling and horse-trading, most political observers and economists are expecting fast bipartisan compromise .  Part of that horse-trading will involve clean energy policy.  We expect that a lot of the money invested in job creation (with a focus on major infrastructure projects) will include a clean energy focus.   Take a look back to the Obama-Biden recovery act after the 2008 housing crisis to see the history we expect to be repeated: support for weatherization, energy upgrades, efficient transportation, and solar on the rooftops of public buildings.

We expect more of this: solar on the roofs of public buildings, investments in batteries for resiliency at public shelter sites and police and fire stations, as well as a huge investment in EV charging stations at locations ranging from libraries to highway rest stops.  Republican cooperation may be achieved with giveaways to utilities  in the form of deferred grid infrastructure, nuclear, controversial carbon capture schemes, and “clean coal”.

  • 12/28/2020 Update: Read more on the passage of the Covid-19 relief package + tax credit extensions here. 

An Extension of the Solar Investment Tax Credit

One hopeful area of bipartisan compromise may be extending (or expanding) the popular tax credit that supports solar. The solar Investment Tax Credit, or ITC, has gone through several stages of expiration and resurrection after its original passage in 2005 under the Bush administration.  The ITC has long been considered “the lifeblood” solar incentive in the United States.  According to the Solar Energy Industries Association, the residential and commercial solar Investment Tax Credit has helped the U.S. solar industry grow by more than 10,000% since it was implemented.  The solar tax credit was originally intended to expire in 2007 but has seen multiple extensions leading up to our current situation: a stepped down “sunset” from 2020 to 2022.

Under the current timetable, the credit declined to 26% for systems placed in service in 2020 and drops to 22% for 2021 and then in 2022 drops to zero for homeowners and levels out at 10% for commercial entities.  One of the primary hopes of the solar industry at large is to see an extension of the tax credit.  Tax credits are often popular with Republicans, and in fact, in 2019 Senator Mitch McConnell approved a tax bill that included an extension of the solar and EV tax credits only to have them eliminated by Trump.  While I don’t think there are Las Vegas oddsmakers for such things I’m going to go out on a limb and predict that there is a greater than 50% chance that we see an extension (or even restoration to 30%) of this popular job creating tax credit in the coming year.

  • 12/28/2020 Update: Read more on the passage of the Covid-19 relief package + tax credit extensions here. 

Solar Tariffs

Another policy issue that Biden may attempt to use his executive authority is the solar tariff. In 2018 the Trump administration enacted a 30% tariff on most solar cells and modules produced outside of the United States.  While this did result in a few domestic module assembly plants, economists and analysts have concluded that it has created net job losses in the solar sector. The few manufacturing jobs created were overshadowed by  job losses in designing, installing, servicing and supplying in the solar installation sector.

Something to note here is that tariffs are less of a factor for residential solar customers (raising costs 1-2% for a typical residential scale project compared to the 8-10% cost increase on the huge utility-scale solar farms being built across the country). Ultimately the International Trade Commission makes decisions on these tariffs, though the President has significant influence in making a case for or against them.

 

The Big Picture

So… after that overview of what may or may not happen depending on control of Congress and the complexities of political compromise, here are some of the very likely actions we expect to see that are within the President’s executive authority.  Many of these actions are described in more detail in this article.

We already mentioned the immense impact of the Federal Government focusing its $500B annual budget on clean energy.  The Department of Defense has been moving in this direction for years and will likely accelerate investments in solar and micro-grids.  A “climate-focused” cabinet is being named as I write, including John Kerry in a new cabinet level role focused exclusively on climate.  As we (re)enter the Paris Climate Agreement we expect many global and domestic policy moves.

Biden will use the  Securities and Exchange Commission (and possibly the Federal Reserve and the Treasury Department) to influence the private sector and capital markets.  He will mandate the inclusion of climate risk reporting, and this will impact the approach to investment underwriting  for many financial analysts and investors.  This phenomenon is already happening in the global markets, as powerful investors continue to downgrade the once powerful fossil fuel giants, sending their share prices and market caps tumbling. The impact of this is two-fold. As investments are less likely to move into carbon exposed businesses, they are more likely to flow toward clean energy replacements.  As their financial power wanes, so too shrinks their political influence in Washington and state capitals. The lobbyists that used to spoon-feed their legislation to our lawmakers will no longer be on speed-dial as they have less and less to donate to PACs and re-election campaigns.

 

The Biggest Climate Action We Expect

Using his executive powers, the biggest climate action Biden will take will be to begin accounting for the “true cost of carbon” in the pricing  of our energy markets.  This “tragedy of the commons” has been long lamented by environmentalists and economists alike.  While I do expect that these externalities are finally internalized, I do  not expect a carbon fee, cap and trade, or any of the other direct carbon pricing mechanisms favored by economists to be enacted (at least in a first term).  Biden did not include them in his “Biden Plan” and did not talk about them in his campaign.  Instead, I expect he will start with many less politically challenging mechanisms available An example of this  low-hanging fruit  is removing the $20B/year in subsidies that are currently given away to fossil fuel interests.

I predict he will remove various protections that open polluters up to paying damages.  He has pledged to stop issuing new drilling leases on Federal Land.  Perhaps most impactful will be the regulation of Methane (and possibly Carbon) as pollutants, leading to the  uptick of effective (and expensive) mitigation technologies. The net result of ALL of these steps will be an uptick in the price of brown energy to the consumer.  Raising brown power prices to better reflect their true cost is as powerful as lowering the price of clean energy with policy support.  This is a powerful phenomenon, and if amplified over time is another factor in what has been described as “the utility death spiral”. As better solar economics leads to more deployment, the utilities fund their bloated operating costs by raising prices. This in turn leads to more uptake of solar which lowers the cost of solar which leads to better solar economics… and then more of the same (you get the picture).

Finally, we expect Biden’s Department of Justice to aggressively go after polluters, especially those who have impacted the air, water, and soil of communities of color for decades.  This focus on intersectionality, equity, and environmental justice was a key campaign theme and will result in real improvements in air and water quality for millions of citizens. Additionally, this focus will eliminate another aspect of the “free ride to pollute” that artificially subsidizes the cost of fossil fuel energy.  As rates go up, reflecting the true cost of dirty energy, the incentive for consumers to invest in efficiency and shift to cleaner alternatives will be a natural market outcome.

 

The Bottom Line

As I have laid out above, I do not predict that we will see the sweeping vision of the Biden Plan as published during the campaign.  Instead, we will get a series of tactical moves that will still add up to have a big impact.  If you are considering solar for an institution or unit of government, I recommend you wait until  mid-2021 for details of the coming support.  In the meantime, I suggest that you begin to explore your options and position your organization to be competitive by getting projects ready (Third Sun Solar is ready to help).

For those considering solar for their home or business, there is no reason to wait.  As I laid out above, we don’t expect any new policies that would directly impact solar economics for private businesses and homeowners.  Solar has already moved from an environmentally righteous action of tree huggers to being a long term economically smart move.  We are hopeful for a tax credit extension and while we aren’t giving out tax advice, we believe that it is safe to expect that any projects placed in service in 2021 that qualify for the current tax credit would qualify for any new and improved tax policy.  As we laid out, we see the biggest policy impacts on the horizon accelerating the (inevitable) rise in the cost of dirty energy.  Investing in on-site solar has always been a “hedge” against energy cost volatility, and with the coming Biden policies, we see a big jump in the price of brown power.  The sooner we make a shift to clean energy, (each of us as individuals and together as a nation) the sooner we will enjoy the many beneficial outcomes: in our monthly budgets, in the air we breathe, and in the stability of the world we leave for future generations.

 

Solar Business in Ohio

Nancy Miller is the CEO and co-owner of Miller Prosthetics & Orthotics in Belpre, Ohio. Her business provides prosthetic and orthotic services in the Mid-Ohio Valley. They strive to return patients back to the activity level they desire from walking and moving to running, fishing, and hunting. Third Sun Solar has been proud to work with a mission-driven business, working as a force for good in the world.  

The Solar Journey

As a member of the Belpre Area Chamber of CommerceNancy first became interested in solar after hearing a presentation made by Luke Sulfridge with the Southeast Ohio Public Energy Council. His presentation explained the free solar assessment process 

Nancy says “Our business, Miller Prosthetics & Orthotics, is eager to stay on the leading edge of technologyWe were the first in our area to request the free solar assessment which also included a quote on the serviceAfter the assessment, I inquired about the REAP (Rural Energy for America Program) grant process with Randel MonehemiusMr. Monehemius is the Business Program Specialist for the Ohio State office, Rural Development of the United States Department of AgricultureHe provided a list of solar companies, and I chose Third Sun Solar for a second quote.”  

What was the businesses motivation for going solar? 

 Nancy says: We are interested in being good stewards of our environmentClean energy is very important, and we are always exploring new technology and looking for efficient business solutions in all areas.”  

The solar journey for the business was straightforwardThey learned that, with the REAP grant and the Federal Tax Credit for solar, the investment in solar panels would be possible. Through the quoting process, they also learned that their location provided ample sun exposure.  

An obstacle they faced when going solar? Nancy says: There were several companies out thereEach quote takes timeAfter researching online, I selected a few companies that were close to our location and had solid experience.”  

When searching for a local solar installer, Nancy paid close attention to these key elements:  

  • Location of the solar company 
  • Strong references 
  • Experience of the contractor 
  • Price of the panels and installation 

 

These are great points for homeowners and businesses alike to keep in mind when choosing a solar installer. The physical structure of our businesses and our homes are often our most valuable assets. Choosing a solar installer to modify and upgrade these valuable assets is an important task. That is why we always encourage solar shoppers we work with to ask for references, look at experience, and make sure their solar partner will be there for them throughout the length of this long-term investment.  

What has the business liked most about the solar energy system – so far?  

Nancy says:  “We had a very good experience from getting the information needed to apply for the REAP grant to designJarrod Starr was very knowledgeable about the process and materialsWe also found confidence after our site visit by Adam BrownHe explained the cost and benefits about locating the panels on the roof vs our initial thought of locating on the hillside behind the buildingHe also helped guide us in picking out panels that would look good with our building. 

We were lucky with great weather for the week of installationJake and his crew did a nice job and were able to install without any disruption to our day to day business 

The power company, AEP, installed the bi-directional meter within a few days of the permit and we were able to turn on the panels the next day – which we were pleased to have 100% sunshine.”  

With the investment in Solar, Miller Prosthetics Orthotics is acting on their intention to be environmentally sustainable.

While offsetting 100% of their energy with renewable power, this energy is enough to annually offset:  

  • Greenhouse gas emissions from 3 passenger vehicles driven for 1 year 
  • CO2 Emissions from charging 1,839,656 smartphones  

Talk about big energy savings!  

Since our installation, we have had several comments from our patients, employees and community members on how they like our new solar panelsThe Solar Edge app is a great way to get immediate feedback on how much power the panels are producing. – Nancy Miller, CEO, and co-owner of Miller Prosthetics & Orthotics.  

If you are interested in learning more about solar, the REAP Grant, solar incentives, and more – reach out for a free, no-obligation solar assessment.  

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