Will Solar Energy Initiative Affect the Real Estate Market?
In February 2006, President Bush announced what's has come to be called the Solar America Initiative (SAI), designed to promote the widespread use of various solar energy technologies in homes throughout the United States by 2015.
It's yet to be determined what effect SAI will have on America's sagging real estate market, and that may actually be beside the point in the initial stages of the program. The overall goal of the program is to expand America's electricity options while reducing the country's dependence on foreign oil, which will ultimately improve the country's overall economy and environment.
U.S. Department of Energy
The push to incorporate more solar technology into American homes will be coming from many different directions, including the U.S. Department of Energy (DOE), which has been given a mandate to encourage more use of solar heat and electricity in homes and businesses, beginning immediately.
The Solar Energy Industries Association (SEIA) recently released a document titled "A Guide to Federal Tax Credits for Solar Energy," offering details about a number of federal solar tax incentives that were enacted as part of the Energy Policy Act of 2005. Included in those incentives is a 30 percent tax credit (up to $2,000) for the installation of qualifying photovoltaic or solar water heating systems in the home.
The same legislation increased the solar tax credit to businesses from 10 to 30 percent, with no cap on the amount of credit that can be claimed, if the systems are installed in 2006 or 2007.
The goal of the tax incentives is to encourage market growth and improvement in solar technology by increasing the demand and acceptance of the concept. As solar technology becomes more ubiquitous, public acceptance should become more mainstream, as well, and providing attractive tax incentives for both homeowners and businesses is a good place to start.
In the face of what looks to be a long-term energy crisis, solar technology is beginning to make more and more sense to the average person. The solar industry is working with member of congress to try to extend the generous tax credit beyond the 2007 date, in hopes of making an even bigger impact on America's energy shortage. Extending the incentives can go a long way toward establishing the U.S. solar industry as a strong alternative to foreign oil.
As American solar technology improves, more and more businesses and homes will begin to use the sun's energy to provide all or part of their heat, hot water, electricity, and cooling needs. In time, home buyers will undoubtedly begin to insist upon having solar technology built into their real estate packages, but for now, the Solar America Initiative should be considered just the first step in moving the United States toward energy independence and greater economic stability.