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A pair of lawmakers Wednesday introduced legislation in the House of Representatives intended to provide a short-term boost to the solar power industry through a two-year 20% increase for a tax credit for small solar systems.

”The Solar Expansion of Distributed Generation Exponentially Act” is projected to generate more than $6 billion in private investment funds, according to Representative Jared Polis. The Colorado Democrat is co-sponsor of the bill, along with Representative Linda Sanchez, Democrat-California.

Through the investment tax credit increase, the bill would allow utilities to engage in distributed generation or to buy back solar power generated by residential and commercial customers with systems under 20 kW.

The current ITC provides a 30% percent tax credit for small solar system purchasers in the residential and commercial sectors, according to the Solar Energy Industries Association. The solar ITC was introduced in 2005 and until 2009, had a $2,000 cost cap on residential solar installations. That was later lifted.  The proposed ITC increase would heighten the tax credit to 50% for small solar systems purchased in 2010 and 2011.

“By creating an increased incentive, we will create a shortterm burst of investment [and] make solar competitive [and more] viable for main street,” Polis said in an interview.

The measure is also expected to create 83,000 jobs in the solar industry, Polis’ office said, citing the SEIA, and to increase US competitiveness in the global solar industry.

“These are exactly the kind of jobs that lead to energy independence,” Polis said.

The Solar Edge Act also creates a financial stopgap for participants in the federal Property Assessed Clean Energy program, which lends money to homeowners for alternative energy sources, and who have also obtained mortgages from government sponsored lenders Fannie Mae and Freddie Mac.

Recently, the mortgage lenders, with support of the Federal Housing Finance Agency, announced they did not support
PACE programs because the loan repayments for the programs took precedent over mortgage loan repayments. This announcement
has temporarily halted PACE programs from continuing in certain states.

The Solar Edge bill comes in the wake of recent legislation introduced by Representative Mike Thompson, Democrat- California, to protect clean energy programs. The bill, the PACE Assessment Protection Act, protects PACE program participants from being threatened by mortgage lenders such as Fannie Mae and Freddie Mac. — Emily Poe