Solar Tax Credit to Spur $40 Billion in U.S. Investment by 2020by
Solar energy capacity will nearly match nuclear power fleet
Employment in solar industry will more than double to 420,000
A federal tax credit approved by Congress on Friday will attract $40 billion in solar investments over the next four years and more than double the number of jobs in the industry to 420,000, according to the Solar Energy Industries Association.
A five-year extension of the investment tax credit will drive U.S. solar installations to 100 gigawatts of capacity in 2020, according to the industry’s main trade group. That’s almost enough to match the country’s entire fleet of nuclear reactors.
The tax credit was previously set to expire at the end of next year. The industry had been expecting a big boom in 2016 as developers raced to qualify, then a sharp dropoff in 2017. The extension came as a welcome surprise and has boosted solar stocks this week as companies now prepare for years of steady growth that may be even stronger than the trade group’s revised forecast.
“I think these are actually conservative numbers,” Rhone Resch, chief executive officer of Washington-based group, said on a conference call Friday. “There’s a great elation in the solar industry.”
That extends to investors in solar companies. The Bloomberg Intelligence Global Large Solar index of 20 suppliers and developers has gained 14 percent in the past week. SunEdison Inc., the largest developer of renewable energy, and SolarCity Corp., the top rooftop solar installer, are both up more than 50 percent over the same period.
The incentive, and the long-term certainty that it will stay in place, will help unleash investment and reduce solar power costs by 40 percent in four years, Resch said. By then, installers will be adding 20 gigawatts a year even as the tax credit starts to ratchet down from 30 percent of a project’s cost to a permanent 10 percent incentive.
“The solar industry now has a seat at the table with the nation’s other major electricity producers,’ Resch said in a statement Friday. “Solar is the planet’s most abundant source of energy and offers all Americans clean electricity that can be built at scale.”