US solar ITC extension would lift installs by 44% this decade but fall short of Biden target

Facebook
Twitter
LinkedIn
Reddit
Email
US President Joe Biden visiting an under-construction solar project during his presidential election campaign. Image: Vote Joe Biden.

A proposed extension of the US solar investment tax credit (ITC) could increase PV deployment by more than 40% over the next decade, analysis by Wood Mackenzie has found.

Late last week Democrats in the House of Representatives unveiled an agreed-upon framework for the budget reconciliation bill which included a 10-year extension to the ITC at a rate of 30% despite speculation that the credit could be watered down during negotiations.

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

While the proposals are yet to be pushed through, analysis conducted by research firm Wood Mackenzie found that the ITC extension could increase PV deployment in the US by 44% if applied to 2032 as planned.

Utility-scale solar in the US would experience the biggest uplift, witnessing an increase in deployment of 51%, while residential and non-residential distributed solar would see increases of 31% and 14% respectively.

In total, US solar deployment between now and 2030 could reach 432GWdc against a base case of 300GWdc if the proposals are enacted, Wood Mackenzie said.

The biggest benefits would be felt in the latter half of the decade, with existing supply chain constraints set to beset solar deployment in the near term. Wood Mackenzie has suggested that from 2025 an ITC extension would boost deployment capacity by more than 30% each year, almost doubling (+92%) deployment in 2030.

With the ITC boosting the cost competitiveness of solar PV, other barriers to deployment would become more pronounced, Wood Mackenzie said, citing grid interconnection as one hurdle in particular.

“While there are additional incentives for grid modernization and transmission capacity in both the infrastructure bill and budget reconciliation package, these projects take years to complete,” Sylvia Leyva Martinez, senior analyst at Wood Mackenzie, said.

The ITC alone would also be insufficient for solar to reach the level of generating capacity required to meet US President Joe Biden’s goal of deriving 80% of the country’s power from carbon-free sources by the end of the decade. Indeed, despite the uplift, total solar generating capacity would reach around 528GWdc by 2030, far short of the 714GWdc target set within the US Department of Energy’s Solar Futures Study.

Greater deployment of energy storage and enhanced grid infrastructure – at both the transmission and distribution level – are required to lift the shackles from solar deployment.

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.

Read Next

July 4, 2025
Germany’s latest innovation tender has awarded 488MW of co-located capacity, with all the projects being solar PV tied with energy storage.
July 4, 2025
Australian retailer AGL Energy has confirmed its acquisition of South Australia’s Virtual Power Plant (SAVPP) from Tesla.
July 3, 2025
Renewable energy curtailment in Brazil is set to reach 8% across the country, and be as high as 11% in the north-east, by 2035.
Premium
July 3, 2025
Meeting the UK’s solar targets will not simply require the installation of new capacity, but investment in grid infrastructure and training.
July 3, 2025
Malaysian engineering and infrastructure giant Gamuda has expanded its presence in the Australian renewables sector by partnering with Tasmanian landowners to build a 1.2GW portfolio, which includes solar PV.
July 2, 2025
The US Senate has narrowly passed – with a 51-50 vote and with vice-president JD Vance breaking the tie – the reconciliation bill yesterday (1 July) without the solar and wind excise tax.

Subscribe to Newsletter

Upcoming Events

Media Partners, Solar Media Events
September 2, 2025
Mexico City, Mexico
Solar Media Events
September 16, 2025
Athens, Greece
Solar Media Events
September 22, 2025
Bilbao, Spain
Solar Media Events
September 30, 2025
Seattle, USA
Solar Media Events
October 1, 2025
London, UK