Solar investment tax credit extension will benefit U.S. utilities, SEPA believes

Share on facebook
Facebook
Share on twitter
Twitter
Share on linkedin
LinkedIn
Share on reddit
Reddit
Share on email
Email

The U.S. Congress’ passage of the Emergency Economic Stabilization Act of 2008 and the subsequent signing into law of the bill by President Bush not only provides government bailout options for the country’s troubled financial sector but includes a strong package of investment tax credits for solar and other renewable energy developers. But the legislation doesn’t stop there. Because of the removal of a prohibition that prevented regulated utility companies from taking advantage of the credit, the Solar Electric Power Association (SEPA) predicts a major increase in large-scale solar photovoltaic and thermal projects by those firms.

Based on announcements and discussions with utility executives this year, SEPA believes that utilities will quickly become the largest and one of the most important customers for the solar industry, expanding solar markets beyond analysts’ expectations. The association predicts that access to the federal tax credit will expedite the time frame and scale to which this happens.

“U.S. electric utilities’ engagement with grid-connected solar electricity has increased significantly in 2008, with major photovoltaic and concentrating solar thermal project announcements totaling more than 5000 MW,” said Julia Hamm, SEPA executive director. “Without the ability to take direct advantage of the ITC, the only viable financial option was to have these plants be owned and operated by independent power producers which then in turn sell the electricity to the utility. The change to the tax credit facilitates utility ownership as another option, which will result in additional projects and innovations.”

SEPA believes, with the policy change, utilities that have a tax appetite and an interest in owning solar-generation projects have an additional incentive to diversify and clean their energy supply with the addition of solar power.

“This is a very positive development for the utility industry as it will go a long way to putting solar power within reach of many more Americans,” said Jim Rogers, chairman/president/CEO of association member Duke Energy. “It is exactly what we need as we explore investing $100 million to install, operate, maintain, and dispatch solar panels on our customers’ rooftops in North Carolina as a viable option to build a bridge to a low-carbon future.”

Rogers is referring to a distributed solar-energy generation program in North Carolina announced by Duke Energy in June, which will encompass up to 850 residential, public, and commercial rooftops and create at least 16 MW of PV-generated electricity.

There’s another benefit from the passage of the ITC, according to SEPA’s Hamm. “The extension of the tax credit also significantly increases the likelihood that recently announced solar projects will come to fruition.” 

One example cited by SEPA ranks as one of the largest planned PV-based utility installations in history: Pacific Gas and Electric’s long-term contracts, announced in August, with thin-film PV company OptiSolar and crystalline-silicon firm SunPower to build 550 MW and 250 MW solar-power plants, respectively, in the Central California county of San Luis Obispo. Both deals, scheduled to be built in phases between 2010 and 2013, were contingent on the extension of the federal credits, the utility said at the time of the original announcement.

The complete list of the solar investment tax credit provisions in the newly passed legislation include:

  • Extension for eight years of the 30% tax credit for both residential and commercial solar installations.
  • Elimination of the $2000 monetary cap for residential solar electric installations, creating a true 30% tax credit
  • (effective for property placed in service after Dec. 31, 2008).
  • Elimination of the prohibition on utilities from benefiting from the credit. 
  • Allowance for alternative minimum tax (AMT) filers, both businesses and individuals, to take the credit.
  • Authorization of $800 million for clean energy bonds for renewable energy generating facilities, including solar.

Hamm will be one of the speakers during the opening-day (Oct. 14) plenary session of Solar Power International,  taking place next week in San Diego.

— Tom Cheyney

28 July 2021
LONGi has launched its Hi-MO N module, the company's first bifacial module with N-type TOPCon cells, designed to deliver ultra- high value and lower LCOE to utility-scale PV power plants. This PV TechTalk Product Series webinar will provide an overview of the module’s technology and how the introduction of n-type technologies will provide efficiency and performance gains for solar project developers.
29 July 2021
This free webinar will explore the ongoing opportunities in the UK solar PV market, looking at global technology trends and how they apply to the UK. Join us for an overview of the project pipeline and forecast for deployment over the coming years. We'll be looking at the types of modules available and being used in the UK and presenting a case study on the deployment of bifacial modules in this market.
19 August 2021
The utility-scale PV market is poised for exponential growth and yet the industry still has many fundamental opportunities to improve on standards and best practice. Tracker shade loss has been one of those topics that deserve more attention, but has been typically handled by derate factors rather than trying to accurately forecast the loss over the life of the system. Join Nextracker’s subject matter experts, Aron Dobos and Neelesh Umachandran, and Rounak Kharait, director of solar energy assessments at DNV, for a webinar about why shade modeling matters and recommendations on what the solar industry should do about it.
25 August 2021
Energy Next is a new industry exhibition focusing on the latest renewable energy and energy efficiency technology, which will be held for the first time in 2021 in Sydney, Australia alongside the Clean Energy Council’s Australian Clean Energy Summit, the peak gathering of leaders driving Australia's energy transformation. Organised by the same people behind Australia’s largest clean energy event, All-Energy Australia, Energy Next will give visitors two days of access to key suppliers in the industry, free-to-attend professional development and industry workshops, and networking opportunities to better understand clean energy issues and solutions and learn about the latest developments in this transformational, dynamic sector.
25 August 2021
The Intersolar Summit Brasil Nordeste takes place in Fortaleza, Brazil. It addresses leading local and international experts on solar power and renewable energy in the region. The Summit’s mission is to provide in-depth education, enable high-quality networking opportunities, expand the use of PV technologies at regional and national level and strengthen the local PV industry. The Intersolar Summit Brasil Nordeste is organized by Intersolar South America - Latin America’s largest exhibition and conference for the solar industry: Solar Promotion International GmbH, Pforzheim, Freiburg Management and Marketing International GmbH (FMMI) and Aranda Eventos & Congressos Ltda, São Paulo as co-organizer.
25 August 2021
Join us to hear directly from the CTOs and heads-of-research from the top-20 cell/wafer producers to the PV industry today. The event will focus on predicting the key metrics underpinning the next big shift to n-type with answers to the key questions: When will the transition to n-type happen? Which companies will be first to 10 GW capacity and production? Who will be the key equipment suppliers for the new production lines? Which n-type process flow/architecture will emerge as the front-runner? What will polysilicon purity and wafer thickness levels look like for optimized n-type manufacturing? What will the upstream poly/wafer supply-chain look like in 5 years from now?

Read Next

July 26, 2021
A solar-wind-energy storage hybrid project is to power a Madagascan mine after Rio Tinto signed a power purchase agreement with independent power producer CrossBoundary Energy.
July 26, 2021
The pace of climate action in the US is “wholly unacceptable”, according to the director of the US Department of Energy’s (DOE) Loan Programme Office
July 26, 2021
Support for distributed energy resources (DERs) like rooftop solar, community solar and battery storage could save Californian ratepayers US$120 billion over the next 30 years, according to a new report
July 26, 2021
Oil and gas giant Eni has acquired 1.2GW of Spanish renewables from Madrid-based European private equity manager Azora.
PV Tech Premium
July 26, 2021
Boris Farnung and Keith Punzalan of VDE and David Moser of EURAC’s Institute for Renewable Energy take a look at the positive impact comprehensive quality assurance measures can have on the early stage of a project’s lifespan, exploring yield assessments, LCOE projections and the critical need for high quality components.
July 26, 2021
US utility giant NextEra Energy added 1.84GW of renewables and energy storage projects to its backlog in Q2 2021, but its Energy Resources division reported a fiscal loss of US$315 million.

Subscribe to Newsletter

Upcoming Events

Solar Media Events, Upcoming Webinars
July 29, 2021
Webinar
Upcoming Webinars
August 19, 2021
At 9am (PT) | 6pm (CEST)
Solar Media Events
August 25, 2021
Solar Media Events, Upcoming Webinars
October 6, 2021