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.

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.

11 October 2022
PV CellTech Extra will be held as a series of live webinars and on-demand sessions on 11-13 October 2022. We'll be taking a slightly further forward-looking view at the technologies and roadmaps for new cell architectures set to dominate mass production during 2023-2025 with special emphasis on the potential timelines for technologies beyond the single-junction cell design, including perovskite and hybrid concepts.

Read Next

October 5, 2022
The Arkansas Public Service Commission has approved Entergy Arkansas’ 250MW Driver Solar Project located near Osceola in Mississippi County.
PV Tech Premium
October 4, 2022
Maxeon’s interim CEO talks to PV Tech about capacity expansions, smart home solutions and the company’s search for a new CEO.
October 3, 2022
Residential solar systems in the US continue to grow in size at the same time as battery attachment rates increase, according to LBNL.
September 30, 2022
US renewable energy major Brookfield Renewable has agreed to spend up to US$2 billion in order to acquire both Scout Clean Energy and Standard Solar.
September 30, 2022
Canadian natural gas pipeline giant Enbridge has bought US renewables developer Tri Global Energy (TGE) for US$270 million in cash and assumed debt.
September 29, 2022
The US DOE’s Solar Energy Technologies Office's director opens up on the impact of the IRA, its five-year plan and barriers to the US’ energy transition

Subscribe to Newsletter

Upcoming Events

On-Demand Webinars, Solar Media Events
October 11, 2022
Virtual event
Upcoming Webinars
October 18, 2022
10am (EDT) / 4pm (CEST)
Solar Media Events
November 29, 2022
Malaga, Spain