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

February 23, 2016
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

Try Premium for just $1

  • Full premium access for the first month at only $1
  • Converts to an annual rate after 30 days unless cancelled
  • Cancel anytime during the trial period

Premium Benefits

  • Expert industry analysis and interviews
  • Digital access to PV Tech Power journal
  • Exclusive event discounts

Or get the full Premium subscription right away

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.

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.
16 June 2026
Napa, USA
PV Tech has been running PV ModuleTech Conferences since 2017. PV ModuleTech USA, on 16-17 June 2026, will be our fifth 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 2027 and beyond.

Read Next

Premium
October 20, 2025
New data suggests the traditional assumptions behind hail stow modelling may be underestimating the likelihood of damage to a PV system.
October 20, 2025
New federal policies in the US will 'cloud' the country’s renewable energy sector, according to a webinar hosted by Wood Mackenzie.
October 20, 2025
Details of tariffs on US imports of polysilicon products may be announced as early as the end of this month, according to a note from investment bank Roth Capital.
Premium
October 17, 2025
According to Ronak Maheshwari of CRC-IB, there has been a struggle for US renewable power projects to secure necessary equity .
October 17, 2025
A group of over 20 US states are suing the Trump administration for the cancellation of the US$7 billion Solar For All Scheme.
October 16, 2025
T1 Energy and Nextracker have agreed to use the latter’s steel module frames at the former’s new 5GW module manufacturing facility in Dallas.

Subscribe to Newsletter

Upcoming Events

Solar Media Events
October 21, 2025
New York, USA
Solar Media Events
November 25, 2025
Warsaw, Poland
Solar Media Events
December 2, 2025
Málaga, Spain
Solar Media Events
February 3, 2026
London, UK