[caption id="attachment_96051" align="alignright" width="400"] Nate Gulbransen, president of Westcoast Solar Energy, stands among 600 panels his company installed on the Blentech Corp. roof in Santa Rosa. Blentech took advantage of the solar investment tax credit in 2013 and today offsets 100 percent of its power needs with solar energy.[/caption]
Speculation is rising in the North Bay about what the U.S. solar market will look like in the wake of the expiration of the federal 30 percent solar investment tax credit for residential and commercial properties at the end of 2016.
While an eight-year tax-credit extension was granted in 2008, many expect the 30 percent benefit to be reduced to 10 percent in 2017 -- or possibly eliminated.
The last extension helped annual solar installations in the U.S. grow by more than 1,600 percent since the investment tax credit, or ITC, was first implemented in 2006, representing a compound annual growth rate of 76 percent, according to the Solar Energy Industries Association (SEIA).[poll id="131"]
In 2013, 140,000 solar systems were installed across the country, the group said. In the first quarter of this year, photovoltaic systems capable of producing 1,330 megawatts of energy were installed nationwide -- the second biggest quarter ever. Today there is a total of 14.8 GW of solar capacity in the U.S., representing 440,000 installations, enough to power three million homes. Roughly half of the market is in California.
Adoption has increased dramatically. Approximately 158,000 solar roofs were installed on California homes in 2013, double the number from 2012, according to CalSEIA.
Two California cities lead the nation. Los Angeles, with 132 megawatts of installed capacity, is rated first of the top 20 U.S. cities, and San Diego (107 megawatts) is second, according to Environment California Research & Policy Center. They are followed by San Jose (94 megawatts), fourth; San Francisco (26 megawatts), ninth; and Sacramento (16 megawatts), 12th.Solar critical mass
Bill Stewart, president and co-founder of SolarCraft in Novato, believes the solar industry has reached critical mass and that policy changes should not have a serious impact on the industry.
"Solar just passed a key milestone and now employs more people in California than all of the state’s investor owned utilities combined. However, a tax-credit reduction to 10 percent would affect third party ownership and leasing."
He said that while the PUC and Governor Brown favor solar, a rate reform case is under consideration that will look at ways to maintain rates so all solar customers pay their fair share.
"Net energy metering (NEM) is a good deal, and NEM 1.0 is still in effect through 2015," Mr. Stewart said. "NEM 2.0 may see solar customers paying a small grid connection fee. Utilities are looking for an accommodation so they won’t see power credited back at less than retail rates."
Mr. Stewart said the cost of solar panels and modules is rising due to a trade case with new tariffs being levied on China. As a result, Chinese manufacturers have cutback on importing solar products to the U.S. until all of this is sorted out. In the past U.S. solar manufacturers could not make money by having to match China’s low, subsidized prices.Not an 'industry-killer'
Peter Renfro, general manager of Westcoast Solar Energy based in Rohnert Park, and interim executive director of Solar Sonoma County, believes a tax-credit reduction would certainly have an impact.