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Dear EarthTalk: Solar

3/11/2015, 3:18 p.m.
Dear EarthTalk: What’s going to happen to the U.S. solar industry when the federal solar investment tax credit expires next ...
Visitors check out First Solar's array of photovoltaic panels outside of San Luis Obispo, California. Russ Ferriday, FlickrCC

Dear EarthTalk: What’s going to happen to the U.S. solar industry when the federal solar investment tax credit expires next year?

In the U.S., a new solar project was installed every three minutes in 2014, and jobs in the solar industry rose from 15,000 employees in 2005 to nearly 174,000 today. This substantial growth is in large part thanks to the Energy Policy Act of 2005’s 30 percent Investment Tax Credit (ITC) for commercial and residential solar energy systems. In 2007, after only one year of implementation, the ITC led to the doubling of installed solar electric capacity. In 2008, Congress passed an eight-year extension of the ITC, allowing solar to become the fastest growing energy source in the U.S. Solar has also become much more affordable: The average installed cost per watt has dropped from around $7.50 in 2009 to $2.89 in 2013.

After December 2016, the ITC solar credit will drop from 30 percent to 10 percent and the residential credit will drop to zero—unless Congress extends this deadline. Large companies are currently making significant solar investments before the solar tax credit deadline arrives. In February 2015, Apple announced that it would spend $848 million over 25 years to buy 130 megawatts of electricity from First Solar’s California Flats Solar Project in Monterey County. The project, which will occupy 2,900 acres of land in Cholame, California, is the solar industry’s largest-ever corporate power purchase agreement.

“Apple’s commitment was instrumental in making this project possible and will significantly increase the supply of solar power in California,” said Joe Kishkill, First Solar’s chief commercial officer. “Over time, the renewable energy from California Flats will provide cost savings over alternative sources of energy as well as substantially lower environmental impact.”

Two weeks after Apple’s announcement, Google announced that they would be making a $300 million investment with SolarCity, America’s largest solar provider, for residential solar projects across 14 states and the District of Columbia. The SolarCity fund, which totals $750 million, is the largest of its kind ever created for residential solar power. “We’re happy to support SolarCity’s mission to help families reduce their carbon footprint and energy costs,” said Sidd Mundra, Renewable Energy Principal at Google. “It’s good for the environment, good for families and also makes good business sense.”

Duke Energy has also played a major role in catapulting solar energy in North Carolina, which ranked third among states during the third quarter of 2014 in installed capacity, according to the Solar Energy Industries Association (SEIA). Duke Energy’s $500 million solar expansion plan includes their recent approval to build three solar farms in eastern North Carolina that will total 128 megawatts of capacity.

“These projects will help provide significant amounts of cost-effective renewable energy to benefit our customers,” said Rob Caldwell, Duke Energy’s senior vice president for distributed energy resources.

To allow solar to continue to soar, the 2016 U.S. Budget includes proposals “to reform and renew tax credits that incentivize the deployment of wind, solar, and carbon capture sequestration technologies.” Ken Johnson, chief spokesman for SEIA, says that his group plans to lobby Congress to extend the credit. “That’s our top priority for this session of Congress,” he said, adding that developers across the solar industry are “trying to do as much as possible before it drops to 10 percent in 2017.”

CONTACTS: First Solar, www.firstsolar.com; Solar City, www.solarcity.com; Duke Energy, www.duke-energy.com; SEIA, www.seia.org.

EarthTalk® is produced by Doug Moss & Roddy Scheer. e-mail us your question: earthtalk@emagazine.com.