EIA’s forecast of solar’s death premature, says SEIA

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A federal report on the future of energy in the US has been too hasty in predicting the diminishing role of solar in the US energy mix.

The study predicted that renewables, slowing demand growth and increased domestic fossil fuel production would drive the country towards becoming a net energy exporter between 2030 and 2040. Its estimates on the full role of renewables, particularly solar, have drawn criticism for being far too conservative.

The Energy Information Administration’s (EIA) Annual Energy Outlook forecast that 31GW of PV installed between 2013 and 2040. The US deployed more than 6GW of solar in 2014 and is expected to install 9.1GW in 2015 alone, according to data from the Solar Energy Industries Association (SEIA) and Bloomberg New Energy Finance (BNEF).

“Simply put, we don’t agree with EIA’s long-term forecast for solar energy and believe that it’s based on some flawed assumptions, which short-changes the outlook for our industry,” said Ken Johnson, VP communications, SEIA.  

Part of the reason for the bumper installs this year is the reduction in the investment tax credit (ITC) for solar from 30% to 10% at the end of 2016. The EIA has factored this into its predictions but Johnson believes it may have overestimated the ITC cut’s impact.

“While we do agree that installations in the US will drop off dramatically in 2017 if the solar ITC is not extended, we’re still hopeful and optimistic that an extension of the ITC remains a very real possibility. But even if the ITC is not extended, the solar industry isn’t going to wither on the vine, as this report seems to indicate,” explained Johnson. 

“Over the short haul, we mostly likely will lose tens of thousands of American jobs, as well as thousands of good companies, without stable public policies like the ITC in place. But solar energy is not going away; it’s not going to die. Advancements in technology, lower prices, consumer demand and climate change will help our industry to eventually bounce back and resume its growth,” he added.

The EIA does not include data for solar installations below 1MW and in a presentation to journalists, stressed that the report has not factored in the impact of the Clean Power Plan, which aims to reduce emissions from the power sector through a number of options including the deployment of renewables.

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