ITC extension opens door to sub-4¢ kWh solar era, says GTM

Share on facebook
Facebook
Share on twitter
Twitter
Share on linkedin
LinkedIn
Share on reddit
Reddit
Share on email
Email
Kann said sub-four cents solar could now become a common occurrence. Image: First Solar.

The expected ITC extension will open the door to utility-scale solar below four cents per kWh, according to GTM’s vice president of research Shayle Kann.

Speaking to PV Tech, Kann said the momentum of solar procurement outside of renewable portfolio standards will now continue apace.

“What's interesting about the extension for utility-scale, is what it does to this trend we had seen in the past 18 months, of significant procurement outside of mandates. Now that will just be extended. You can easily imagine that PPAs for utility-scale solar are going to start being regularly signed below four cents a kWh and below,” he said.

So far this price level has been a freak result rather than the norm.

Legislation has been passed to Congress that would keep the 30% rate till 2019 before falling to 26% the following year and 22% in 2021 before remaining permanently at 10% thereafter. The new deadlines will only require projects to have commenced construction, not to have been grid-connected as is currently the case.

“With a 30% ITC extension you have a lot of states for which solar is going to be the most economic option for utilities looking to procure any  kind of new generation. You have places like the mountain states, which have some pretty aggressive Clean Power Plan targets, you could see a lot of demand in those states, Montana, Utah, the Dakotas. Some of the south east states too where we have already seen meaningful procurement, you could see that picking up substantially now,” said Kann.

Since speaking to PV Tech, GTM has since released preliminary new forecast for US demand predicting a 54% uptick till 2020 compared to the no extension scenario.

“The ITC extension currently written into the omnibus spending bill will result in a 20GW annual solar market in the US by 2020,” said Kann in a press statement released alongside the figures. “At that rate, more solar will be installed each year than was added to the grid cumulatively through 2014.”

Read Next

September 9, 2021
A letter co-signed by more than 750 US organisations has called on US Congress to push through policies to significantly ramp up renewables deployment in the country.
PV Tech Premium
September 3, 2021
For years California, Texas and Florida have dominated the US solar market, but backed by the investment tax credit, strong state-specific renewables standards and falling costs, new states are coming to the fore. Molly Lempriere takes a look at what is driving them, and the hurdles they face if they are to challenge the ‘Big Three’.
August 25, 2021
The US renewables sector has welcomed the House of Representatives’ approval of a budget resolution that provides the framework for a US$3.5 trillion spending package.
August 18, 2021
The US’ transition to a carbon pollution-free power sector could see solar provide more than 40% of the country’s electricity by 2035, up from the current 3% level, according to a memo from the Department of Energy (DOE).
PV Tech Premium
August 13, 2021
An amendment added to the US budget resolution bill this week seeks to prevent renewables projects using technology built in China from claiming federal funds and subsidies. Liam Stoker explores the amendment’s potential to disrupt solar deployment.
August 10, 2021
The US Senate has passed the landmark bipartisan infrastructure bill, paving the way for US$1.2 trillion of investment into the nation’s infrastructure.

Subscribe to Newsletter

Upcoming Events

Solar Media Events
October 6, 2021
Solar Media Events
October 19, 2021
BRISTOL, UK
Solar Media Events
December 1, 2021