NREL: Solar tax credits to boost US deployment by up to 20GW

Facebook
Twitter
LinkedIn
Reddit
Email
Source: SunEdison.

The extension of solar investment tax credits (ITC) will support steady growth in US PV deployment, according to a new study by the National Renewable Energy Laboratory (NREL). The research group found that by 2022, 20GW of solar that would not have been installed without the ITC will be in the ground.

The ITC had been set to drop at the end of 2016 to zero for residential installs and 10% for all others. But an extension passed at the end of 2015 means it will remain at 30% until 2019 and then fall to 26% the following year and 22% in 2021 before remaining permanently at 10% thereafter.

This article requires Premium SubscriptionBasic (FREE) Subscription

Unlock unlimited access for 12 whole months of distinctive global analysis

Photovoltaics International is now included.

  • Regular insight and analysis of the industry’s biggest developments
  • In-depth interviews with the industry’s leading figures
  • Unlimited digital access to the PV Tech Power journal catalogue
  • Unlimited digital access to the Photovoltaics International journal catalogue
  • Access to more than 1,000 technical papers
  • Discounts on Solar Media’s portfolio of events, in-person and virtual

Or continue reading this article for free

The new deadlines will only require projects to have commenced construction, not to have been grid-connected as is currently the case.

The study considered different natural gas prices but found that there was little difference in the predicted level of solar deployment.

The positive impact becomes harder to model with time, according to the NREL, which starts to see reductions in solar capacity between its models with and without the extension. 

The cumulative installed capacity of solar (left) and wind power in the US. Source: NREL.

Wind power additions were found to be more sensitive to natural gas prices.

The NREL figures for total annual deployment in 2016 would appear to be conservative with 5.77GW of predicted solar, including utility-scale and rooftop PV plus concentrating solar power. On Monday, market research firm GTM Research said the US had installed 7.3GW in 2015. While some projects were expedited to avoid missing the original cut-off point for the ITC of end-2016, the main thrust of the rush had been expected in 2016.

The study also found that the tax credits will reduce the levelised cost of energy (LCOE) of solar from now until 2025 before it reaches a level that would have been achieved without the tax credits.

For areas with the best solar resource, it forecasts an LCOE for utility-scale solar of under US$50/MWh by 2020 and around US$40/MWh by 2030. This would appear to match its prediction that the impact of the ITC extension will begin to wane around the middle of the next decade.

The second part of the paper estimated CO2 reduction between 2016-2030 as a result of the wind and solar tax credit extensions of 540-1400 million metric tonnes.

17 June 2025
Napa, USA
PV Tech has been running PV ModuleTech Conferences since 2017. PV ModuleTech USA, on 17-18 June 2025, will be our fourth PV ModulelTech conference dedicated to the U.S. utility scale solar sector. The event will gather the key stakeholders from solar developers, solar asset owners and investors, PV manufacturing, policy-making and and all interested downstream channels and third-party entities. The goal is simple: to map out the PV module supply channels to the U.S. out to 2026 and beyond.
7 October 2025
San Francisco Bay Area, USA
PV Tech has been running an annual PV CellTech Conference since 2016. PV CellTech USA, on 7-8 October 2025 is our third PV CellTech conference dedicated to the U.S. manufacturing sector. The events in 2023 and 2024 were a sell out success and 2025 will once again gather the key stakeholders from PV manufacturing, equipment/materials, policy-making and strategy, capital equipment investment and all interested downstream channels and third-party entities. The goal is simple: to map out PV manufacturing in the U.S. out to 2030 and beyond.
21 October 2025
New York, USA
Returning for its 12th edition, Solar and Storage Finance USA Summit remains the annual event where decision-makers at the forefront of solar and storage projects across the United States and capital converge. Featuring the most active solar and storage transactors, join us for a packed two-days of deal-making, learning and networking.

Read Next

June 9, 2025
Solar manufacturer Qcells has launched a recycling arm, called EcoRecycle, and a recycling plant in the US state of Georgia.
June 9, 2025
Growing political headwinds threaten to dent US solar manufacturing and project deployment, despite a strong start to 2025.
June 9, 2025
US residential solar installer Sunnova has laid off more than half of its workforce, while a subsidiary from Delaware filed for Chapter 11 bankruptcy.
June 6, 2025
rPlus Energies has secured more than US$500 million for an 800MW solar-plus-storage project in Emery County, Utah, US.  
June 5, 2025
Policy uncertainty in the US is likely to disrupt investment in clean energy, according to a recent report from Crux.
June 5, 2025
Investment in clean energy and grids will reach US$2.2 trillion in 2025, double the expected investment into fossil fuels this year, according to data from the International Energy Agency (IEA).

Subscribe to Newsletter

Upcoming Events

Solar Media Events
June 17, 2025
Napa, USA
Upcoming Webinars
June 30, 2025
10am PST / 6pm BST
Solar Media Events
July 1, 2025
London, UK
Solar Media Events
July 1, 2025
London, UK
Solar Media Events
September 16, 2025
Athens, Greece