- As many as 1,000 companies in the American solar industry supply chain have signed on a letter to US Congress demanding extension for 30% solar ITC that’s due to reduce by the end of 2019
- The US Solar Energy Industries Association (SEIA) is leading this campaign pointing at the positive development and investment the tax credits have helped bring into the country
- A report in Reuters points out that jittery developers are procuring and stockpiling modules before the planned reduction which could backfire if the demand reduces or there is a drop in panel prices
The hugely popular solar tax policy in the United States, the US Investment Tax Credit (ITC) is due to start coming down from the current 30% for projects that start development or construction at the end of 2019 to 26% in 2020, and further down to 22% in 2021 and finally 10% in 2022.
But many American companies do not want the tax credit to go down from the current 30% limit. Hence, they have come together to petition the government to extend the ITC.
As many as 1,000 US solar companies along the entire supply chain, under the leadership of the US Solar Energy Industries Association (SEIA), have written a letter to Congress calling for extension of Section 48 and Section 25D solar ITC. The list of companies in this letter includes leading solar names such as SunPower, Sunrun, Trina Solar (US), Vivint Solar.
SEIA credits the ITC to have created more than 200,000 jobs and adding $140 billion in private sector investment. Solar power capacity deployment has grown by 10,000% ever since it was enacted by George W. Bush’s led government in 2005. Barack Obama’s administration extended it in 2015. America boasts more than 2 million solar installations in 50 states so far (see US Now Home To Over 2mn Solar Installations).
Explaining the need to have the full ITC up and running even beyond 2019, Swinerton Renewable Energy President George Hershman said, “The ITC extension will help maintain a stable market for continued solar development in the utility sector. This directly translates into investments in our nation’s rural communities by supporting more jobs across the solar value chain, providing long-term energy solutions at a lower cost to rate payers, and increasing the state and local tax base.”
Worried about the impending reduction of the ITC, several solar power developers in the country are stockpiling modules, according to Reuters, which argues the strategy could backfire if projects do not materialize or panel prices slide substantially. Yet, big names like Duke Energy, 8minute Solar Energy and Shell backed Silicon Ranch are some of the projects that are aiming for the full subsidy for their projects provided they start construction on their facilities by the end of 2019 or spend 5% of a project’s capital cost by the stated period.
Reuters also cites Wood Mackenzie’s claim that project developers will safe harbour close to 31.2 GW of US solar installations to maximize their tax credits.