New Bloomberg New Energy Finance Report Forecasts Strong, Steady Solar Growth — with the Investment Tax Credit (ITC) Extended
ANAHEIM, CALIF. and WASHINGTON, D.C. – September 15, 2015 – (RealEstateRama) — A new report from Bloomberg New Energy Finance (BNEF) predicts substantially more solar generating capacity will get built in the United States, and a major industry downturn will be avoided, if the federal solar investment tax credit (ITC) is extended at its current level.
The ITC is set to drop from 30 percent to 10 percent for commercial systems and zero for residential systems at the end of 2016. According to the BNEF analysis, this will produce a sharp drop in industry activity in 2017. Developers will scramble to complete projects with contracts based on the current credit before the end of next year. That pipeline depletion, and weaker economics, will result in a drop of roughly 8 gigawatts (GW) in annual installations through 2017. Such a dramatic drop would bring new solar installation activity to its lowest annual level since 2012.
BNEF also explored the impact of a 5-year extension of both the residential and commercial credits at 30 percent, with the addition of a commence-construction clause. Enacting such an extension by mid-2016 helps prevent the highly-disruptive 2017 cliff currently set in law.
“With a proposed five-year federal ITC extension, we anticipate an additional 22 GW of solar will get built by 2022,” Bloomberg analyst Madeline Yozwiak said. “Without it, we still anticipate solar growth in the next decade, but it will be a much rockier ride.”
In a separate analysis, pairing the BNEF forecast with the Jobs and Economic Development Impacts model (JEDI) developed by National Renewable Energy Laboratory (NREL), the Solar Energy Industries Association (SEIA) found the U.S. would lose more than 80,000 solar jobs during 2017 alone without an ITC extension. Factoring in the fallout from related industries that stand to be impacted, the analysis shows a loss of more than 100,000 American jobs from failure to extend the ITC.
“The good-paying jobs of more than 100,000 Americans and thousands of U.S. companies – many of them small businesses – are at risk if the ITC is not extended,” said SEIA President and CEO Rhone Resch. “As the voice of the solar industry, SEIA will not rest until Congress fully understands the importance of this critical policy. The time to act is now.”
The ITC is a 30 percent federal tax credit for solar systems on residential (Section 25D) and commercial (Section 48) properties that, under current law, remains in effect through Dec. 31, 2016. After that, unless Congress takes action, the commercial credit will drop to 10 percent and the residential credit will expire fully.
To read more of the findings from both analyses go to http://www.seia.org/research-resources/solar-itc-impact-analysis.
About Bloomberg New Energy Finance:
Bloomberg New Energy Finance (BNEF) provides unique analysis, tools and data for decision makers driving change in the energy system. With unrivalled depth and breadth, we help clients stay on top of developments across the energy spectrum from our comprehensive web-based platform. BNEF has 200 staff based in London, New York, Beijing, Cape Town, Hong Kong, Munich, New Delhi, San Francisco, São Paulo, Singapore, Sydney, Tokyo, Washington D.C., and Zurich.
BNEF products fit your daily workflow, streamline your research, sharpen your strategy and keep you informed. BNEF’s sectoral products provide financial, economic and policy analysis, as well as news and the world’s most comprehensive database of assets, investments, companies and equipment in the clean energy space. BNEF’s regional products provide a comprehensive view on the transformation of the energy system by region.
BNEF’s services and products are owned and distributed by Bloomberg Finance L.P., except that Bloomberg L.P. and its subsidiaries (BLP) distribute these products in Argentina, Bermuda, China, India, Japan, and Korea. For more information on Bloomberg New Energy Finance: http://about.bnef.com, or http://about.bnef.com/request-info/ for more information on our services.
Celebrating its 41st anniversary in 2015, the Solar Energy Industries Association® is the national trade association of the U.S. solar energy industry. Through advocacy and education, SEIA® is building a strong solar industry to power America. As the voice of the industry, SEIA works with its 1,000 member companies to champion the use of clean, affordable solar in America by expanding markets, removing market barriers, strengthening the industry and educating the public on the benefits of solar energy. Visit SEIA online at www.seia.org.
Alex Hobson, SEIA Press Officer & Communications Manager, (202) 556-2886
Ethan Zindler, Bloomberg New Energy Finance Head of Americas, (202) 416-3466