Industry will nosedive by 2017 without tax credits — report

Source: Daniel Bush, E&E reporter • Posted: Friday, September 18, 2015

The number of new solar projects in 2017 could drop to the lowest annual level since 2012 if Congress doesn’t extend an investment tax credit that is slated to get slashed by two-thirds at the end of next year, a new report shows.

New solar installations would drop by 8 gigawatts through 2017 if the current 30 percent tax credit for commercial projects isn’t extended beyond 2016, according to a study released today by Bloomberg New Energy Finance.

If Congress doesn’t act, the ITC for commercial solar projects would fall to 10 percent and the 30 percent residential tax credit for solar projects would be zeroed out starting in 2017.

Under that scenario, the solar industry would see annual installations decline to levels not seen since 2012, the report found. If Congress extends the ITC for at least five years, the industry would add up to 22 GW of solar power through 2022, the report said.

Without the ITC, “we still anticipate solar growth in the next decade, but it will be a much rockier ride,” said Bloomberg analyst Madeline Yozwiak.

The industry also stands to lose more than 100,000 direct and indirect jobs through 2017 if the tax credits aren’t extended, according to a separate study by the National Renewable Energy Laboratory and the Solar Energy Industries Association.

“The good-paying jobs of more than 100,000 Americans and thousands of U.S. companies — many of them small businesses — are at risk,” SEIA President and CEO Rhone Resch said in a statement.

The solar industry has added 80,000 new jobs since 2010 but still generates 1 percent of overall domestic energy production, Resch said at an annual energy forum earlier this year (E&E Daily, Jan. 22).

That figure is expected to grow to 1.6 percent in 2016 with the addition of up to 12 GW of solar power, Resch said at the forum. ITC critics have argued that the industry’s small slice of the energy sector doesn’t justify continued federal investment (E&ENews PM, April 2).

The lobbying push around the solar ITC will intensify when Congress turns to a tax extenders package later this year. The Senate Finance Committee passed its extenders package before the August recess, but the House has yet to take up the issue.