Toronto, Canada and Knoxville, Tennessee, April 1, 2021 – Solar Alliance Energy Inc. (‘Solar Alliance’ or the ‘Company’) (TSX-V: SOLR) is pleased to provide an overview of the American Jobs Plan proposed by U.S. President Biden and the positive impact it believes those proposals will have on the U.S. solar industry generally and Solar Alliance specifically.
President Biden is proposing a ten-year extension of the Investment Tax Credit (“ITC”) and an expanded “direct pay” ITC for solar projects. These two key proposals have the potential to accelerate Solar Alliance’s growth and the Company’s ability to own and operate solar projects.
With operations focused in the U.S. and with a backlog of projects under various stages of agreement with combined capital costs totaling approximately US $66 million, the Company is well positioned to benefit from these two key provisions of the Jobs Plan.
Solar Alliance believes the American Jobs Plan announced by President Joe Biden will provide historic support for the U.S. solar industry and contribute to a strong recovery post-COVID-19.
“The U.S. solar industry has received a tremendous show of support from President Biden as the country begins to emerge from the economic slowdown caused by COVID-19,” said CEO Myke Clark. “Solar Alliance managed to navigate a difficult 2020 and continued to grow our pipeline of solar projects during an unprecedented year. The American Jobs Plan contains key provisions that will accelerate our growth as a company and allow us to contribute to the rebuilding of the economy through clean energy project deployment.”
Investment Tax Credit Extension
The current ITC is a 26 percent tax credit for solar systems. The ITC was in the process of being phased down when Congress passed a two-year delay in 2020. President Biden’s American Jobs Plan proposes to extend the ITC ten years, providing a strong long-term signal to the solar industry. According to the Solar Energy Industries Association, the solar ITC has helped the U.S. solar industry grow by more than 10,000% percent since it was implemented in 2006, with an average annual growth of 50% over the last decade alone.
Direct Pay of Investment Tax Credit
Currently, the business that installs, develops and/or finances the project claims the credit. A tax credit is a dollar-for-dollar reduction in the income taxes that a person or company would otherwise pay the federal government. But many developers don’t have sufficient tax liability to take full advantage of the tax credits themselves. In these cases, developers partner with a third-party investor using tax equity financing. Utilizing third-party tax equity can be an expensive process for the types of commercial solar projects being built by Solar Alliance.
Direct cash payments in lieu of the ITC would be a significant incentive that would allow developers to benefit directly from tax credits rather than pay a premium to tax investors. The goal is to enable projects with little or no taxable income to quickly monetise the credits, allowing completion of construction at lower cost and creating jobs, rather than having to carry the excess credit forward to apply to a future tax liability. Full details on the direct pay provision are yet to be released, but they have the potential unlock significant project opportunities. Under a direct cash payment model Solar Alliance would be able to utilize the tax credits on projects it will own without the need to pay third parties for tax equity.
“Solar Alliance continues to build out a backlog of project opportunities by focusing on the high margin sectors of the solar industry – residential developers and builders, commercial clients, microgrid solutions for larger clients and large-scale project development opportunities. The provisions contained in the American Jobs Plan align perfectly with our growth strategy and will help support jobs and clean energy deployment in the U.S.,” concluded Clark.
Myke Clark, CEO
About Solar Alliance Energy Inc. (www.solaralliance.com)
Solar Alliance is an energy solutions provider focused on residential, commercial and industrial solar installations. The Company operates in Tennessee, Kentucky, North/South Carolina and several other states and has an expanding pipeline of solar projects. Since it was founded in 2003, the Company has developed wind and solar projects with a combined capital cost exceeding $1 billion that provide enough electricity to power 150,000 homes. Our passion is improving life through ingenuity, simplicity and freedom of choice. Solar Alliance reduces or eliminates customers’ vulnerability to rising energy costs, offers an environmentally-friendly source of electricity generation, and provides affordable, turnkey clean energy solutions.
Statements in this news release, other than purely historical information, including statements relating to the Company’s future plans and objectives or expected results, constitute Forward-looking statements. The words “would”, “will”, “expected” and “estimated” or other similar words and phrases are intended to identify forward-looking information. Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the Company’s actual results, level of activity, performance or achievements to be materially different than those expressed or implied by such forward-looking information. Such factors include, but are not limited to: uncertainties related to the ability to raise sufficient capital, changes in economic conditions or financial markets, litigation, legislative or other judicial, regulatory and political competitive developments and technological or operational difficulties. Consequently, actual results may vary materially from those described in the forward-looking statements.
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