Solar Energy To Boom, Thanks To ITC Extension

BAKERSFIELD, Calif. - Dec. 23, 2015 - PRLog -- On December 18, 2015, the US Senate and House of Representatives signed a bill, agreeing to extend to the 30 percent (ITC) investment tax credit for solar energy, which was supposed to fall to 10% at the beginning of 2017 for non-residential and third-party-owned residential systems, and zero for residential systems in 2017.

However, the ITC got a few years' reprieve, and will continue at 30 percent levels for both commercial and residential systems through 2019, before dropping to 26% in 2020 and 22% in 2021. The credit will then be eliminated for individual  homeowners beginning in 2022, but continues for an indefinite period at 10% for commercial installations.

The bill also sets forth a section that states that  projects that come online by the end of 2023 , will be eligible for larger credits based on the year in which construction began.

All of this is a big win for solar companies, as it makes solar more affordable for American families and businesses all across the country.

It also ensures that solar manufactures will continue advancing new technologies, driving down costs and passing on the savings, since there is now a more predictable policy in place.

Without the extension, researchers had predicted that U.S. solar installations would have dropped by 6.5 GW in 2017 from 2016. Instead, market projections point towards 72 gigawatts of new capacity of U.S. solar between 2016 and 2020, including 5 GW in the commercial market, and 7 GW in the residential market, which has undergone incredible growth over the past few years.

Companies like Energy Independence Solar in Bakersfield, CA, http://www.eigsolar.com/ which sells solar products that are eligible for the 30 percent tax credit are also expected to see growth, as their customers can take advantage of a significant reduction in costs to their systems thanks to the ITC extension, which has lent a helping hand in the declining price of solar projects and capital costs.

Various researchers report solar costs have fallen from $12/W in 1998 to under $4/W in 2014, and with the ITC firmly in place, is well on its way to reaching a very possible $1/W by 2020.

All the same, the solar industry must now turn its attention to the soft costs like permitting, financing and installation, which are all making up a bigger portion of the price tag for new projects than the cost of hardware itself.

The solar industry needs to bring the same intensity as it  did to the ITC to the regulatory fights, taking on the utilities proposed net metering and preset charges, interconnection and permitting fees and various other challenges that can stymie the industry's growth, and ultimately if not addressed, ruin its success.

Nevertheless, the ITC is a win-win across the board for the solar industry and will continue to do exactly what it’s supposed to do — support the development and growth of renewable energy.

The legislation has removed a lot of uncertainty for the industry going forward and has made the future for solar very positive or bright.

By Matt Martz