A five-year extension to the solar investment tax credit (ITC) will see the US have a 20-GW annual solar market by 2020, GTM Research estimates.
The extension, which is currently included in the omnibus spending bill under consideration in Congress, would result in additional deployment of 25 GW of solar capacity over the next five years. This represents a 54% increase compared to a no-extension scenario, the firm says. In the utility-scale sector, an ITC extension will boost deployments 73% through 2020, residential installations will be up 35% against no extension, while commercial solar will grow by 51%.
"Given price trends in the utility solar sector, the five-year ITC extension will likely result in utility-scale solar contracts being signed for less than 4 cents per kilowatt-hour on a regular basis over the next two years," said GTM Research senior analyst Cory Honeyman.
The firm projects that extending the ITC will foster USD 40 billion (EUR 36.8bn) in incremental investment in solar between 2016 and 2020.
The ITC is due to drop from 30% to 10% on January 1, 2017 for commercial projects. The spending bill envisages the ITC staying at 30% through 2019 and falling to 26% in 2020 and 22% in 2021. The bill also includes a "commence-construction" provision. The rate will be 10% from 2022.
(USD 1.0 = EUR 0.921)
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