A new analysis report from Bloomberg New Energy Finance (BNEF) sheds some additional light on the consequences facing the US solar market if Congress opts to let the current Investment Tax Credit (ITC) expire in 2016.
The report, commissioned by the Solar Energy Industries Association (SEIA), charts two separate scenarios – one in which the residential credit is removed and the commercial credit drops from 30% to 10%, and another case where the current 30% ITC for commercial and residential use is extended for five years, with a commence construction clause added.
According to BNEF, if the current ITC is not extended past 2016, installed solar capacity is expected to drop by nearly 8GW from 2016 to 2017. During that same time, solar project levels would also fall from 11.2GW in 2016 to 3.2GW in 2017 – standing as the lowest annual level since 2012.
If the ITC is extended, however, over 69GW of new PV power would be developed across the US between 2016 and 2022, standing as a 22GW increase over the current policy.
Of that estimated surge in solar power, the utility-scale sector is projected to install more than 31GW between 2016-2022, over 10GW more than what is projected in a scenario with no ITC credit. The commercial market is expected to gain an additional 5GW with an ITC extension, while the residential segment stands to grow an additional 7GW.
A potential extension of the ITC will pave the way for 95GW of new solar by 2022, generating an output of 144,000 TWh annually, per the report. According to those numbers, this influx of new PV power in the US would have the potential to power 19 million homes and account for 3.5% of US energy generation – an increase from 0.1% in 2010.
Utilising the National Renewable Energy Laboratory’s (NREL) Jobs and Economic Development Impacts model (JEDI), SEIA calculated data from the report in regards to the impact that an expired ITC could have on employment in the solar industry.
Without an ITC extension, the US is projected to lose 80,000 solar jobs in 2017, as well as an additional 20,000 positions in related fields. In contrast, an ITC extension would create 61,000 more solar jobs in 2017.
Rhone Resch, president and CEO of SEIA, said: “The good-paying jobs of more than 100,000 Americans and thousands of U.S. companies – many of them small businesses – are at risk if the ITC is not extended. As the voice of the solar industry, SEIA will not rest until Congress fully understands the importance of this critical policy. The time to act is now.”
In total, the investment in the US economy from solar between 2016-2022 is estimated at over US$124 billion – US$39 billion more than if the current ITC expires.
While Congress prepares to tussle over measures such as the fate of the current ITC, various US senators and representatives have announced their support for the extension of the tax credit.
In late August, Senator Charles E. Schumer (D-NY) announced his plan to fight for new legislation revolving around both extending the ITC and amending certain aspects of the credit, such as changing current eligibility rules that limit businesses from taking advantage of the ITC until the panels that they install are “placed in service”.