SEC. 2. EXTENSION AND MODIFICATION OF INVESTMENT 
TAX CREDIT WITH RESPECT TO SOLAR EN-
ERGY PROPERTY AND QUALIFIED FUEL CELL 
PROPERTY. 
(a) 
SOLAR
ENERGY
PROPERTY.—Paragraphs 
(2)(A)(i)(II) and (3)(A)(ii) of section 48(a) of the Internal 
Revenue Code of 1986 are each amended by striking 
‘‘2008’’ and inserting ‘‘2017’’. 
(b) ELIGIBLE FUEL CELL PROPERTY.—Paragraph 
(1)(E) of section 48(c) of the Internal Revenue Code of 
1986 is amended by striking ‘‘2007’’ and inserting 
‘‘2016’’. 
(c) ENERGY PROPERTY TO INCLUDE EXCESS EN-
ERGY
STORAGE
DEVICE.—Clause 
(i) 
of 
section 
48(a)(3)(A) of such Code is amended to read as follows: 
‘‘(i) equipment which uses solar en-
ergy to generate electricity, to heat or cool 
(or provide hot water for use in) a struc-
ture, or to provide solar process heat, or 
advanced energy storage systems installed 
as an integrated component of the fore-
going, excepting property used to generate 
energy for purposes of heating a swimming 
pool,’’. 
(d) SOLAR
LIGHTING
EQUIPMENT
TO
INCLUDE 
SOLAR HYBRID LIGHTING SYSTEMS.—Clause (ii) of sec-
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tion 48(a)(3)(A) of such Code is amended to read as fol-
lows: 
‘‘(ii) equipment which uses solar en-
ergy to illuminate the inside of a structure 
using fiber-optic distributed sunlight,’’. 
(e) MODIFICATIONS.— 
(1) SOLAR PHOTOVOLTAIC ENERGY PROPERTY 
CREDIT DETERMINED SOLELY BY KILOWATT CAPAC-
ITY.— 
(A) IN GENERAL.—Subsection (a) of sec-
tion 48 of such Code is amended by redesig-
nating paragraph (4) as paragraph (5) and by 
inserting after paragraph (3) the following new 
paragraph: 
‘‘(4) SPECIAL RULE FOR ENERGY CREDIT FOR 
SOLAR PHOTOVOLTAIC ENERGY PROPERTY.— 
‘‘(A) IN GENERAL.—For purposes of sec-
tion 46, the energy credit for any taxable year 
for solar photovoltaic energy property described 
in paragraph (3)(A)(i) which is used to gen-
erate electricity and which is placed in service 
during the taxable year is $1,500 with respect 
to each half kilowatt of capacity of such prop-
erty. Paragraph (2)(A)(ii) shall not apply to 
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property to which the preceding sentence ap-
plies. 
‘‘(B) APPLICATION OF SPECIAL RULES FOR 
REHABILITATED OR SUBSIDIZED PROPERTY.— 
Rules similar to the rules of paragraphs (2)(B) 
and (5) shall apply to property to which this 
paragraph applies.’’. 
(B) 
CONFORMING
AMENDMENT.—Sub-
clause (II) of section 48(a)(2)(A)(i) of such 
Code is amended by striking ‘‘described in 
paragraph (3)(A)(i)’’ and inserting ‘‘which is 
described in paragraph (3)(A)(i) and to which 
paragraph (4) does not apply’’. 
(f) CREDITS ALLOWED AGAINST THE ALTERNATIVE 
MINIMUM TAX.—Section 38(c)(4)(B) of the Internal Rev-
enue Code of 1986 (defining specified credits) is amended 
by striking the period at the end of clause (ii)(II) and in-
serting ‘‘, and’’, and by adding at the end the following 
new clause: 
‘‘(iii) the portion of the investment 
credit under section 46(2) as determined 
under clauses (i) and (ii) of section 
48(a)(2)(A).’’. 
(g) EFFECTIVE DATES.— 
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(1) Except as provided in paragraph (2), the 
amendments made by this section shall take effect 
on January 1, 2007. 
(2) The amendments made by subsection (c) 
shall apply to property placed in service after De-
cember 31, 2006. 
SEC. 3. EXTENSION AND MODIFICATION OF CREDIT FOR 
RESIDENTIAL 
ENERGY 
EFFICIENT 
PROP-
ERTY. 
(a) EXTENSION.—Subsection (g) of section 25D of 
the Internal Revenue Code of 1986 (relating to termi-
nation) is amended by striking ‘‘2008’’ and inserting 
‘‘2016’’. 
(b) SOLAR ELECTRIC PROPERTY.—Paragraph (1) of 
section 25D(a) of such Code (relating to allowance of cred-
it) is amended by striking ‘‘30 percent of’’. 
(c) MODIFICATION
OF MAXIMUM CREDIT.—Para-
graph (1) of section 25D(b) of the Internal Revenue Code 
of 1986 (relating to limitations) is amended to read as 
follows: 
‘‘(1) MAXIMUM
CREDIT.—The credit allowed 
under subsection (a) for any taxable year shall not 
exceed— 
‘‘(A) $1,500 with respect to each half kilo-
watt of installed capacity of qualified solar elec-
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tric property for which qualified solar electric 
property expenditures are made, 
‘‘(B) $2,000 with respect to any qualified 
solar water heating property expenditures, and 
‘‘(C) $500 with respect to each half kilo-
watt of capacity of qualified fuel cell property 
(as defined in section 48(c)(1)) for which quali-
fied fuel cell property expenditures are made.’’. 
(d) DEFINITION
OF
QUALIFIED
SOLAR
WATER 
HEATING PROPERTY EXPENDITURE.—Paragraph (1) of 
section 25D(d) of such Code is amended by striking ‘‘to 
heat water for use in’’ and inserting ‘‘to heat or cool (or 
provide hot water for use in)’’. 
(e) DEFINITION
OF
QUALIFIED
PHOTOVOLTAIC 
PROPERTY EXPENDITURE.—Paragraph (2) of section 
25D(d) of such Code is amended by inserting ‘‘, including 
advanced energy storage systems installed as an inte-
grated component of the foregoing’’ after ‘‘taxpayer’’. 
(f) CREDIT ALLOWED AGAINST ALTERNATIVE MIN-
IMUM TAX.— 
(1) IN GENERAL.—Section 25D(b) of the Inter-
nal Revenue Code of 1986 (as amended by sub-
section (b)) is amended by adding at the end the fol-
lowing new paragraph: 
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‘‘(3) CREDIT ALLOWED AGAINST ALTERNATIVE 
MINIMUM TAX.—The credit allowed under subsection 
(a) for the taxable year shall not exceed the excess 
of— 
‘‘(A) the sum of the regular tax liability 
(as defined in section 26(b)) plus the tax im-
posed by section 55, over 
‘‘(B) the sum of the credits allowable 
under subpart A of part IV of subchapter A 
(other than this section) and section 27 for the 
taxable year.’’. 
(2) CONFORMING AMENDMENTS.— 
(A) Subsection (c) of section 25D of such 
Code is amended to read as follows: 
‘‘(c) CARRYFORWARD OF UNUSED CREDIT.—If the 
credit allowable under subsection (a) for any taxable year 
exceeds the limitation imposed by subsection (b)(3) for 
such taxable year, such excess shall be carried to the suc-
ceeding taxable year and added to the credit allowable 
under subsection (a) for such succeeding taxable year.’’. 
(B) Section 23(b)(4)(B) of such Code is 
amended by inserting ‘‘and section 25D’’ after 
‘‘this section’’. 
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(b) 
CONFORMING
AMENDMENT.—Section 
168(e)(3)(B)(vi)(I) of such Code is amended to read as 
follows: 
‘‘(I) would be described in sub-
paragraph (A) of section 48(a)(3) if 
‘wind energy’ were substituted for 
‘solar energy’ in clause (i) thereof and 
the last sentence of such section did 
not apply to such subparagraph,’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to property placed in service after 
December 31, 2006. 
Æ 
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