GTM Research: ITC extension would grow the U.S. solar market 54% through 2020

One thing that most of the U.S. solar industry can agree upon is that extension of the federal 30% Investment Tax Credit (ITC) would have a big impact on the U.S. solar market.

However, just how big of an impact is a matter of wide speculation. Today GTM Research put some numbers to this, by forecasting that if the tax credit is extended through 2020 per the language in the current omnibus spending bill, then PV installations will grow to 20 GW annually by 2020.

This will include $40 billion more in incremental solar investment between 2016 and 2020. According to the company’s forecast, under this scenario 2017 installations would be higher than 2015 levels.

However, GTM Research’s forecast of roughly 10 GW to be installed in 2017 would still be a decline from around 13 GW in 2016. This is due to the impact of plans already made by developers based on the expectation that the ITC will expire.

The company expects a particularly sharp impact for utility-scale sector PV, and for ITC extension to increase deployment in this sector 73% through 2020. GTM Research also expects that given current price trends, ITC extension will likely result in utility-scale solar contracts being regularly signed at under US$0.04 per kilowatt-hour over the next two years.

This would mean solar clearly beating new natural gas generation on price, and could further the dominance of solar over other conventional generation.

In the residential solar market, the company expects a 35% increase versus no extension, and a 51% growth in commercial solar.