Solar tax credit extension would bring in $87B — report

Source: By David Iaconangelo, E&E News reporter • Posted: Tuesday, September 24, 2019

The solar industry’s trade association is framing the federal investment tax credit as the cornerstone of its plan for solar to power a fifth of the nation’s electricity — even as the future of the credit appears uncertain.

Neither the House’s nor the Senate’s tax extender packages have included provisions that would extend the solar investment tax credit (ITC), which begins declining from 30% at year’s end and falls to its baseline of 10% in 2022.

But in a policy forecast released today, the Solar Energy Industries Association said that keeping the tax credit at its current levels would bring online an additional 82 gigawatts of solar capacity, or the equivalent of 15 million homes’ worth of power.

It would also be a little over 15% of the way to the group’s 500-GW goal for 2030. If developers can bring that much solar power online by 2030, it wrote, it would contribute about 20% of the nation’s power generation.

“In our mind, we probably can’t reach that goal without an extension of the ITC,” said Dan Whitten, the group’s vice president of public affairs. “There may be other ways to get it done, but when we look at the numbers, that additional 82 GW is a big part of getting there.”

SEIA promised in July to increase its lobbying and advertising activities concerning the credit, and in addition to the tax extenders, several legislators on both sides of the aisle have co-sponsored legislation (Energywire, July 17).

Free-market opponents of the ITC said they would watch for signs that an extension was gaining traction.

In 2015 congressional negotiations, SEIA told lawmakers it wouldn’t need an extension once the credit began to step down — “so we are going to hold them to it,” said Kenny Stein, director of policy at the American Energy Alliance.

“The subsidy lobby never give up,” said Myron Ebell, a former Trump transition team adviser and director at the Competitive Enterprise Institute’s Center for Energy and Environment, in reference to renewable industries.

SEIA’s projection, co-authored by clean energy analyst Wood Mackenzie, estimated that extending the tax credit would create over 113,000 jobs and attract some $87 billion in new investment over the course of the decade.

Utilities would take on 40% more projects. Eight additional states, and 41 states in total, would host at least 1 GW of utility-scale capacity, the group said.

Those new projects would help displace coal generation and kindle corporate deals to offset emissions using large-scale solar, it said.

It would also give a significant lift to behind-the-meter photovoltaic installations for businesses and other places, and residential solar — especially in “low-penetration, emerging state markets.” Otherwise, residential growth would remain flat through most of the decade.

Combined with other policy aids, like a price on carbon and expanded credits for energy storage, solar could becoming the largest source of new power generation by 2030, according to a road map published by the group yesterday.

At that scale, solar would also slash about 35% of the power sector’s greenhouse gas emissions, it said.

That path “must be immediate, aggressive, collaborative and national in scope,” SEIA wrote. “While the 20% by 2030 goal is certainly achievable, it is not inevitable.”