In a move that provides a great source of relief to the solar industry, the 30% investment tax credit (ITC), arguably responsible for a significant portion of the industry’s growth, has been extended to 2019.
The decision by lawmakers will give solar projects around the country a chance to stay on top of their goals, and will grant the 30% credit to all projects that begin by 2019.
Lobbyists spent a better part of 2015 convincing congress to extend the ITC, which was set to fall down to 10% in 2017. If the ITC didn’t extend, some publications claim that the drop in 2017 would have been “disastrous”.
Current projects would have been rushed to be completed by 2016, subsequently leading to a massive drop in solar output. According to BusinessWire, the possible rush would have lead to a 17 gigawatt (GW) output to just a 6.5 GW output in 2017.
Although there might be future talk to keep the 30% tax credit alive past 2019, the current agreement is to drop to 26% in 2020, 22% in 2021, and then to 10% after that.
The Solar Energy Industries Association (SEIA), the nation’s trade association for solar energy, applauded the decision to extend the ITC, listing out the many results that can come about.
According to a SEIA press release, the ITC will be attributed towards:
At 100 gigawatts, that would represent 3.5% of all electricity generation in the U.S. Right now, according to Travis Hoium of The Motley Fool, total solar output accounts for 1% of all electricity.
Business Wire also pointed out that the ITC extension provides an advantage not only for the US solar industry, but for the global industry as well. Global installations could very well reach between 66 and 68 GW in 2016, eventually reaching 70+ GW in 2017.