The race is on for utility-scale solar installations in the U.S. to become operational before the expiration of the 30 percent Federal energy investment tax credit (ITC) on December 31, 2016. According to leading analytics company IHS, over 32 gigawatts (GWs) of projects greater than 5 megawatts (MWs) in size are still in development or under construction.
Currently, in order for a renewable energy project to qualify for the ITC, it must be “placed in service” by December 31, 2016. Utility-scale project developers have actively been lobbying to change the ITC language from a “placed in service” standard of eligibility to a “commence construction” standard. Under the current rules, lengthy delays in permitting and approval — or the inability to secure a power off-taker — could be critical to projects becoming operational in time to qualify for the credit.
According to IHS Solar Deal Tracker:
- NextEra has indicated that it will install 1.5 GWs of Hanwha Q Cells by the end of 2016 in several states, including California, Georgia, Florida, and Hawaii.
- Canadian Solar dramatically increased its project pipeline in the United States, with the company’s recent acquisition of Recurrent Energy including a 150 MW project for Austin Energy in Texas and several other projects in California.
- The most recent wave of proposed projects is in the 20 MW to 100 MW range.
- Recent project approvals by the Bureau of Land Management encourage installations in designated Solar Energy Zones.
If no bill is signed to extend the current 30 percent rate, the U.S. Federal ITC will drop to 10% for 2017 and beyond. This will have a significant impact on the number of utility-scale solar project in the U.S. going forward.
Tracey is an accountant and entrepreneur with a passion for nature. This passion is what spurred her interest in renewable energy, and the rest is history as they say. Tracey is a principal in Energy Think Group, the publisher of Solar Thermal Magazine and Tek-Think. She is also the principal at Women's Financial Help Desk. She spends her free time in the outdoors with her horses and dogs. She loves to travel.