Renewable Energy Tax Credits News Briefs - December 2014

Monday, December 1, 2014

On Oct. 27, the Federal Energy Regulatory Commission (FERC) released its “Energy Infrastructure Update” for September 2014. FERC found that renewable energy made up more than 40 percent of all new U.S. electrical generating capacity for placed-in-service projects during the first three quarters of 2014. Results also indicated that of the 8,860 megawatts of new U.S. capacity installed since Jan. 1, 187 units of solar totaled 1,671 MW (18.86 percent); 28 units for wind totaled 1,164 MW (18.22 percent); seven units of hydropower totaled 141 MW (1.59 percent); 38 units of biomass totaled 140 MW (1.58 percent); and five units of geothermal units totaled 32 MW (0.36 percent). The report is available at www.ferc.gov.

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The U.S. Department of Energy’s (DOE) SunShot Initiative released the report, “Photovoltaic System Pricing Trends: Historical, Recent and Near-Term Projections (2014 Edition).” The Sept. 22 report, written by David Feldman of National Renewable Energy Laboratory (NREL) and Galen Barbose of Lawrence Berkeley National Laboratory, provides an overview of past, recent and projected near-term photovoltaic (PV) system pricing trends in the United States. It also examines progress in PV price reductions. The DOE determined that the general downward trend in PV system pricing continued in 2013 and is expected to continue through 2016. Results indicated that modeled utility-scale PV system prices fell below $2 a watt in 2013, and have continued to decline in 2014 to approximately $1.80 a watt, which is 59 percent below what modeled pricing showed in 2010. Feldman said in a press release that price drops are consistent with previous annual reductions achieved since 2010, when the SunShot Initiative was established, but that the report also indicates significant variations in pricing geographically and across market segments due to a variety of factors. The SunShot Initiative is a collaborative national effort that aims to make solar energy fully cost-competitive with traditional energy sources before the end of the decade.

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Solar Energy Industries Association (SEIA) launched a national campaign Oct. 20 to extend the 30 percent solar investment tax credit (ITC) beyond 2016. The announcement was made by Rhone Resch, SEIA president and chief executive officer, at the opening session of Solar Power International. Resch said he wanted to emphasize tax fairness. In his speech, Resch stated that the solar industry has gone from being an $800 million industry in 2006 to a $15 billion industry, and that the price to install a solar rooftop system has been cut in half, while utility systems have dropped by 70 percent. He argues that the industry is worth fighting for. The text of his speech is available at www.seia.org.

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The American Wind Energy Association (AWEA) announced its U.S. Department of Energy (DOE) third quarter report Oct. 20. AWEA stated that 19 wind projects have been completed this year and that 419 megawatts (MW) came online in the third quarter. AWEA also noted that fix-priced wind energy is the most affordable energy option available. The results also provided that there are 105 projects under construction that will produce 13,600 MW. The report is available at www.awea.org.

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On Oct. 26, the U.S. Energy Information Administration’s (EIA) Deutsche Bank released a report asserting that grid parity is expected to be reached in 36 states in 2016. Grid parity occurs when an alternative energy source can produce electricity for the same cost as the electricity availability on a utility’s transmission and distribution grid. EIA indicates this will occur if the United States maintains the 30 percent tax credit on system costs. The report stated that solar energy has already reached grid parity in 10 states that are responsible for 90 percent of U.S. solar electricity production. EIA also found that solar electricity is on track to be as cheap as or cheaper than average electricity bill prices in 47 U.S. states in 2016, and that solar prices will continue to drop as technology improves and financing becomes more affordable. Vishal Shah, Deutsche Bank analyst, said in the report that in the 10 states that have already reached grid parity, the installed capacity growth will increase as much as sixfold over the next three to four years. EIA also indicated that the reason solar-power generation will increasingly dominate is that it is a technology and not a fuel. As such, efficiency increases and prices fall as time goes on. A recent estimate provided in the report by the International Energy Agency found that solar energy may be the world’s biggest single source of electricity by 2050. The report is available at www.eia.gov.

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