Abengoa to Build U.S. Solar Plant “If” Tax Credit Stays

The solar arm of Spanish engineering firm Abengoa is planning to break ground on one of the largest solar thermal plants in the world in Arizona next year…if the U.S. government extends its solar incentive program, Abengoa Solar CEO Santiago Seage tells MarketWatch in this video clip (embedded below). Seage says the company will start construction on the 284 MW, 1,900-acre solar plant called Solana in 2009 “if we have an ITC (investment tax credit) extension” — which would keep in place the tax credit that is set to expire by the end of the year and provides funds for 30 percent of the cost of a solar system.

We’re not sure what the company’s plans for Solana are if the ITC is not extended (the company already has a contract with Arizona utility APS to buy the clean power). What is becoming clear is that solar companies are starting to realize that they might need a Plan B. Solel CEO Avi Brenmiller has said that his company won’t be able to build a planned 553 MW solar thermal project without the credit. And the CEO of solar panel maker SunPower recently said it would start focusing on markets outside the U.S. if the credit doesn’t survive (check out that full story in SunPower CEO: No U.S. Solar Incentives? No Solar For You).

While many are expecting, and hoping, the ITC will get attention this year, the U.S. government doesn’t seem to be moving too quickly on it. Just this week a bill to extend it failed to get enough votes to move it into debate and an overall vote in the Senate. The end of the year is fast approaching and as Donna Flynn, Washington Council for Ernst & Young, said at a recent solar conference, the solar industry is in big trouble if the ITC isn’t extended very soon — “before July 1st” — she said. That’s about a week-and-a-half away.