Yesterday, a group of bankers and analysts from Wall Street investment firms and venture capitalist firms called on Congress to pass an eight-year extension of the solar Investment Tax Credit (ITC), that is set to expire at the end of 2008, stressing its importance in building investor confidence and stimulating industry growth. Thats right, a bunch of suit wearing old rich white guys want the United States government to continue to push money into “hippy” technology, specifically solar (sorry, wall street still hasn’t come around on the hemp Birkenstocks trend yet).

The U.S. Senate is expected to vote on legislation to provide for a long-term extension of the ITC (S. 2821, the Clean Energy Stimulus Act of 2008) as early as this week.

Since the solar ITC was established as part of the 2005 energy bill, the solar energy industry has grown at a rate of more than 40 percent per year. Utilities and solar energy companies have announced plans for numerous projects to provide utility-scale solar power to states from Florida to Nevada. On the commercial and residential side, energy users from military bases, retail stores and homeowners have added solar energy generation to their land and buildings. But investors are worried that if the ITC is allowed to expire at the end of 2008, rapid progress made within the industry could slow to a halt.

“We believe solar projects will become cost effective in the future without the federal tax credits,” said Edward Levin, vice president of global structure products at Morgan Stanley, “But the current federal tax incentives are still vital for industry growth and continued investor confidence. The tax incentives need to be extended to avoid a market interruption that could significantly set back U.S. solar development.”

“The ITC is serving as an important building block for solar energy’s migration into mainstream electricity markets,” said Sanjay Shrestha, managing director of equity research in alternative energy at Lazard Capital Markets. “If extended, the ITC will accelerate project activity, helping the U.S. evolve into one of the most pivotal solar markets in the world.”

The solar ITC has been scored to cost approximately $700 million over the course of ten years. This amounts to less than 1 percent of the $40 billion in subsidies that fossil fuels energy companies receive every year. And not even worth comparing to the MASSIVE amount of money wasted on the war for oil, war for Dick Cheney, war for Halliburton, war in Iraq. CNN reported that with the proper investment incentives, renewable energy could stimulate as many as three million new jobs over the next two decades.

Ed Sproull, senior vice president of energy at HSH Nordbank, predicted that “with an extension of the solar ITC, solar development will continue to accelerate because it makes economic sense to investors.”

“Without [the ITC], we risk seeing the steady progression of investment grind to a halt, threatening job growth, tax revenue generation, and energy independence in the process,” said Nancy Pfund, managing partner, DBL Investors. “Most importantly, we need … to continue backing those that invest in solar improvements so that costs come down and financing products can be developed to make solar accessible to all.”