432 GW New Solar For US By 2030?

Wood Mackenzie: ITC Extension To Up Solar Deployment, But Not Enough

432 GW New Solar For US By 2030?

Wood Mackenzie analysts count grid constraints, unavailability of enough distributed solar sites and absence of enough storage as limiting US solar deployment even if a 10-year solar ITC extension is passed. (Illustrative Photo; Photo Credit: TR STOK/Shutterstock.com)

  • Solar ITC extension in the US for next 10 years would add 432 GW DC more capacity between now and 2030
  • Most impact would be visible from 2025 onward as supply chain constraints ease, and will bring down utility scale solar cost
  • It would not be enough to achieve full grid decarbonization as grid constraints will be a deterrent among other factors

In case of a 10-year extension of the US solar investment Tax Credit (ITC), Wood Mackenzie expects the country to add 432 GW DC of new capacity between now and 2030. It would be an increase of about 44% from the base outlook of 300 GW DC, but it would fall short of enabling full grid decarbonization.

With the extension, the largest impact would be seen from 2025 with more than 30% coming up annually growing to 92% by 2030 as near-term supply constraints ease for the utility scale solar sector.

Notably, the current US President Joe Biden has proposed a 10-year extension for the ITC and currently the plan is before the Congress as part of a budget reconciliation package (see US President Proposes 10-Year Extension For ITC).

If approved, the extension would apply to projects that enter construction by the end of 2032, however analysts fear that even this won’t be enough to achieve 80% carbon-free electricity generation by 2030 as envisioned by the Biden administration. It should take the country’s cumulative installed solar power capacity to 528 GW DC by 2030, about 26% lower than 714 GW DC/525 GW AC expected by the US Department of Energy’s Solar Futures Study (see US Wants 40% Electricity From Solar By 2035).

“Wood Mackenzie’s outlook for solar growth is limited by grid constraints, as well as available sites for distributed solar,” explained Wood Mackenzie Senior Analyst Sylvia Leyva Martinez. “But long-term, our forecast assumes that grid upgrades will eventually relieve congestion and long-duration storage makes more solar feasible.”

Nonetheless what the extension would do is reduce the future cost of utility scale solar, making it competitive with wholesale power prices, while increasing residential solar capacity by 31% and non-residential solar going up by 14%.

“The direct pay provisions of the proposed extension will be a major win for small and medium non-residential projects (<1 MW) thanks to the challenges of securing tax equity,” added Martinez.

About The Author

Anu Bhambhani

Anu Bhambhani is the Senior News Editor of TaiyangNews

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