Analyst: Solar to Lose Tax Credit Training Wheels
Posted at 2:24 p.m. on Aug. 5, 2014
U.S. President Barack Obama (L) tours a solar power site with Col. Howard Belote (C) and Senate Majority Leader Harry Reid, D-NV, at Nellis Air Force Base in May 2009.
(Photo by John Locher-Pool/Getty Images)
The utility-scale solar power market in the United States is expected to falter in the next couple of years, contracting when the investment tax credit is no longer renewed, before expanding as a viable market, according to Ethan Zindler, head of policy analysis at Bloomberg New Energy Finance.
“We do think the market will continue on its way because we think solar is becoming economic without subsidies,” he told those attending a discussion of solar power hosted by the Center for Strategic and International Studies at the Energy Department Tuesday.
Zindler expects the cost of producing solar power cells as well expenses for permitting and installation will continue to decline as investments continue.
“Solar increasingly represents a larger overall share of investment in clean energy,” he said. His group expects to see 4.6 to 5.6 gigawatts of utility and consumer solar to be added in the United States this year.
“Our view is that there’s a lot of great opportunity for this market and that prices are going to continue to decline and that this is going to continue to play a much larger role in the overall energy ecosystem,” Zindler said, while maintaining that solar will remain less than 20 percent of the generation mix. “It’s certainly not going to replace fossil anytime soon,” he said.
According to his group’s analysis, markets in some countries are already cost competitive without subsidies.
“We expect continued strong growth globally,” Zindler said. “What we’re starting to see is a lot more opportunities for PV or photo voltaic in countries that don’t have very large grids, but for whom solar can make sense on an economic basis to just go straight to PV without building out massive hub-and-spoke kinds of grids.”