A new report has found that if the solar ITC is stepped down from 30% to 10% in 2017, as is scheduled, it would represent a cliff off of which the U.S. solar industry would fall. Solar PV would become uncompetitive across the entire spectrum of segments and geographies considered in our studies, found the Stanford Graduate School of Business authors. The report investigates the solar market in California, Colorado, New Jersey, North Carolina and Texas.
As an alternative, the report has modeled an alternative phase down scenario which would see the ITC stepped down gradually through to 2024, after which point solar across different market segments would be competitive.
SEIA has attacked the reports findings, arguing that a fatal flaw in the reports argumentation is that it ignores how the U.S. Tax Code has favored fossil fuel exploitation and power sources including nuclear, making it more difficult for solar and other renewable energy sources to compete in the marketplace without incentives.
Unfortunately, the report looks at the solar Investment Tax Credit in a vacuum, without any consideration given to the 100-year history of preferential tax treatment enjoyed by fossil fuels, said Rhone Resch, SEIA president and CEO. This results in a distorted view of reality.
Simply put, the solar ITC has helped to balance the scales and provide some measure of tax fairness, Resch continued.
SEIA argues that solar is currently employing 175,000 million Americans, and worth $20 billion annually to the U.S. economy. As such, according to SEIA, the ITC is delivering on its investment.
The U.S. solar industry association does agree with the Stanford paper in one aspect however, in that if the ITC is stepped down at the beginning of 2017 the industry is headed for a cliff.
The Stanford report was prepared by Stephen D. Comello and Stefan J. Reichelstein and is available online.