Under the new tax policy that has passed this year in California (SB71), clean energy companies are awarded with tax deduction as an encouragement to the renewable energy sector development. The tax breaks take the form of sales and use of tax exemptions for businesses that benefit the environment.
Among the companies that have benefited from the tax breaks are Nanosolar, Bloom Energy and Solyndra. According to Energy Prospects, their tax deduction is $71.5 million on $785.7 million in manufacturing equipment investment.
The advantages of this action extends beyond the intended use, creating environmental $48 million worth benefits to the state and $55 million fiscal benefits in long term job growth, for example.
The authorities responsible for the selections, California Alternative Energy and Advanced Transportation Financing Authority (CAEATFA), estimate that the state of California will get more back than give away, in both environmental and financial benefits.
By 11th October, a first deadline for submitting projects, the authorities had received 15 applications, 12 of which have been approved this week.
The Governor of California, Arnold Schwarzenegger, signed the new tax policy bill, from Sen. Alex Padilla (D-Pacoima), in March, which authorizes CAEATFA to approve projects for the sales-and-use tax exemption. In the past, the clean energy sector had seen so much financial support for development, only during the Carter era, with Jerry Brown as Governor of California.