ITC extension will assist solar growth, says US Energy Secretary

The solar industry in the U.S. can grow and survive without the need for subsidy support, U.S. Energy Secretary Ernest Moniz has said, but as a tool for addressing climate change an extension of the ITC will prove valuable, he added.

With the price of solar having fallen dramatically over the past few years, Moniz believes that the cost of electricity from rooftop solar arrays could fall to $0.06/kWh in some U.S. states very soon – a situation that would make solar "extremely competitive" with fossil fuel-based power generation sources.

Democrats in Congress are pulling hard for an extension of the Federal Investment Tax Credit (ITC), which currently stands at 30% until January 1, 2017.

However, despite the Obama administration fully backing the goal of extending that 30% ITC further, Moniz is nevertheless sanguine about solar’s ability to survive free from subsidies.

"I certainly see solar growing, even without subsidy," Moniz said. "The cost reductions have been incredible for the solar industry, making for an improved value proposition in many contexts."

Moniz’s remarks followed earlier comments he made explaining that the playing field for renewables is still not level, and that the ITC is important in accelerating the deployment of clean energy. "We are now at the stage where certainly if the services are being valued fully, including things like being close to peak hours, let’s say, with solar, the value proposition is largely there in many, many contexts," he said. "So without subsidy, I would still see solar growing, but clearly we don’t have a lot of time."

The Obama administration is in favor of supporting the extension of the ITC indefinitely, but a Republican-controlled Congress is likely to throw up roadblocks to stop that from happening. The issue, however, is not as simple as Democrats being in favor of renewables and Republicans in opposition – the growth of the wind industry has been rooted in many red states, prompting support for further subsidy support among Republicans in Congress.

pv magazine has explored this issue in dept in the September edition of the magazine. You can read more here.

This article was amended on September 4 to more accurately reflect the Energy Secretary’s comments that despite solar’s ability to survive subsidy-free, an extension of the ITC would prove beneficial.