• The US Congress has not considered the solar industry’s demand to extend the 30% ITC for PV deployments in the country
  • It has extended the PTC for onshore wind developers for another year
  • Industry is of course not happy with the decision, but Wood Mackenzie experts believe solar will thrive given its increasingly competitive economics

Wind power developers in the US fared better than their PV counterparts as Congress rejected the solar industry’s demand for extension of the existing 30% Investment Tax Credit (ITC) beyond 2019. Onshore wind power developers will get an extension for another year though for the Production Tax Credit (PTC).

This means 30% ITC will start dropping down to continuously to 10% in 2022 for new solar power systems before it expires.

Extensive lobbying efforts were made by the industry together to get the government extend the ITC, but their hopes were dashed (see US Solar Firms Join Hands Demanding ITC Extension).

The American Council on Renewable Energy (ACORE) President and CEO Gregory Wetstone termed the agreement as a ‘squandered opportunity’. He added, “Given bipartisan support for tax incentives for energy storage, offshore wind, electric vehicles and other critical clean energy priorities, this outcome is deeply disappointing. This is not the time to be kicking the climate can down the road. If we’re going to have any chance at reducing greenhouse gas emissions to the level that scientists say is necessary, we need smart policies to accelerate the ongoing transition to a renewable energy economy and a modernized, 21st century grid.”

The US Solar Energy Industries Association (SEIA) called it a missed opportunity to boost the US economy and jobs, and tackle climate change, but said it will continue the fight with the support it has received from all stakeholders, including that from 14 House Republicans for ‘meaningful policy, including provisions for clean energy storage in 2020’.

“We will look for opportunities next year to again engage our incredibly supportive solar community and work with Congress on clean energy policies that work for all Americans,” said President and CEO of SEIA, Abigail Ross Hopper. 

While there is disappointment in the air currently, Ravi Manghani , Head of Solar Research at Wood Mackenzie Power & Renewables, pointed out that the removal of the ITC will have ‘muted impact’ on the industry that has been preparing for its end as solar offers ‘increasingly competitive economics’ to grow further. 

The industry may feel a bit disappointed by the exclusion, but honestly speaking, they weren’t banking on the extension to come through,” Greentech Media quoted Manghani as saying. “It puts a damper on holiday spirits, but the industry will come back next year with very little lost.”