Solar boom expected to set 4th-quarter record — report

Source: Daniel Cusick, E&E reporter • Posted: Friday, December 11, 2015

The U.S. solar industry notched its eighth consecutive quarter of more than 1 gigawatt of newly installed capacity during the August-October period, industry figures released today show.

The third-quarter figure of 1,361 megawatts of new installations sets the U.S. solar photovoltaic industry on a trajectory to break its previous annual growth record, set in 2014, and is the sixth largest quarterly growth in history.

For the full year, GTM Research projects the industry will install 7.4 GW of new PV capacity, a 19 percent increase over the 2014 record of 6.24 GW.

The jump also heralds what experts say will be an industrywide rush to complete solar projects before a key federal subsidy for solar is curtailed at the end of 2016.

“This past quarter marked the calm before the storm,” Cory Honeyman, a senior solar analyst with GTM Research, which compiled the data for the Solar Energy Industries Association, said in a statement. “The 1-gigawatt mark for quarterly capacity additions will serve as a distant floor as project developers ramp up installations in the next five quarters before the planned step down of the 30 percent federal Investment Tax Credit.”

Like other renewable energy tax credits, the ITC is credited with helping sustain an unprecedented solar boom in the United States since 2010, spurring the development of an expected 41 GW of power generation by the end of 2016, a near-doubling from today’s installed capacity.

“Year after year, we’re seeing the demand for solar energy in America skyrocket, and the benefits that brings to both our nation’s economy and environment are staggering,” SEIA President and CEO Rhone Resch said in a statement.

“As we gear up for what’s expected to be an unprecedented year for our industry, and nation, this report reveals just how important it is to maintain smart, effective, forward-looking public policies, like the ITC,” he added.

Under current law, the tax credit will be revised downward at the end of 2016, providing a 10 percent tax credit toward the cost of commercial solar systems but no credit for residential systems. The solar industry has been lobbying Congress to extend the ITC, perhaps before the end of the year (E&E Daily, Dec. 1). But there are obstacles, including a Republican-controlled Congress that views renewable energy tax credits warily.

If not a long-term extension, backers of the ITC are trying to get Congress to pass language that would allow any project that commences construction before 2017 to be eligible for the tax credit, as opposed to requiring that the energy system be in service by the deadline.

That political uncertainty, at least in the near term, is further fueling the U.S. solar boom, experts say. GTM said in its analysis that the fourth quarter of this year should be the largest in history, with more than 3 GW of new solar power coming online.

Utility-scale installations should notch the strongest growth, followed by residential and commercial systems. The two segments together account for 83 percent of the current U.S. solar market, according to GTM. Commercial solar installations have traditionally lagged behind utility and residential systems. That trend is expected to continue into 2016, according to GTM.