Fri. Dec 6th, 2019

US Photo voltaic Business Braces for ITC Phasedown Whereas Making Case For One other Extension

The U.S. photo voltaic trade is starting meticulous preparations for coping with the part out of the federal funding tax credit score (ITC). On the identical time, voices calling for an extension of the ITC or a softening of its decline are getting louder.

“Local weather change is topical because of the Inexperienced New Deal, amongst different issues,” SunPower CEO Tom Werner stated onstage Tuesday at Greentech Media’s Photo voltaic Summit in Phoenix. “We have to do one thing about local weather change, and essentially the most simple factor is to increase the ITC and the [wind] PTC.”

2019 is the final 12 months that the photo voltaic trade can make the most of the ITC’s full 30 % worth earlier than it incrementally steps all the way down to 10 % in 2022 and past for business and utility tasks. The credit score drops to zero for residential installations in 2022.   

Photo voltaic corporations have made clear they are not banking on an extension of the ITC, and plenty of see the probability of an extension as low. A part of the renewables trade’s pitch because it sought and in the end secured a multi-year extension of the wind PTC and photo voltaic ITC in 2015 was that a phasedown would assist usher in a post-subsidy period.

However the risk the photo voltaic ITC could possibly be prolonged as soon as once more is now being brazenly talked about, by the trade in addition to politicians.

“I’m undecided anybody would say we will plan round congressional motion,” Alex McDonough, vp of public coverage at Sunrun, stated onstage Tuesday. “The prudent factor to do is to arrange for a phasedown and advocate for an extension.”

“I do see the constructing blocks for a deal coming collectively, however we’ve got to arrange,” McDonough stated.

In its newest lobbying disclosure, the Photo voltaic Vitality Industries Affiliation, the trade’s primary commerce group, notes the extension of the tax credit score amongst its problems with focus. In early April, over 100 members of Congress signed a letter of help for clear vitality tax incentives. The photo voltaic trade sees the present political give attention to local weather change as advantageous to its trigger.

In a later interview, Werner stated SunPower “completely” helps extending the credit score, regardless of many within the trade having assumed the earlier extension can be the final.

“We as an trade stated get us out to 2020 and that’s good. Now we’re out to 2020 going, properly, it’d be nice when you pushed that even additional,” Werner advised GTM.

“So I feel the contradiction is actual. What I’d advocate for is to step [the ITC] down slower,” he added.

Werner known as the credit score’s present decline “pretty dramatic,” however stated the trade must evolve past reliance on incentives.

“After we have been going via the extension final time, I stated the concept of it sunsetting in a couple of years is smart, as a result of we have to get prices down and we shouldn’t need to depend on a tax credit score eternally,” he stated.

“But it surely’s a reasonably dramatic stepdown, so … one thing that’s greater than three years earlier than it goes to zero can be one thing we might completely advocate for.” 

SunPower, like many corporations, is just not holding its breath for an extension. Werner places the probabilities of an extension within the 10 to 15 % vary. 

Within the meantime, SunPower is hedging its bets by qualifying photo voltaic tools for the complete ITC.

Builders can “secure harbor” tasks by investing 5 % of the overall price, a technique the wind trade — whose PTC is phasing down even sooner — has been pursuing at large scale for a number of years.

Protected harboring is on the minds of many within the photo voltaic trade lately.

Scott Moskowitz, director of technique and market intelligence at photo voltaic producer Hanwha Q Cells, stated the time to plan is now. “There may be nonetheless provide accessible, I feel there’s a number of time left in 2019,” he advised the convention.

Tanguy Serra, chief technique officer at photo voltaic mortgage supplier Loanpal, stated the trade will hold pushing forward no matter whether or not the ITC phases down on schedule.

“So long as the trade actually focuses on lowering prices … issues will probably be effective,” stated Serra. “And if the ITC will get prolonged, that creates extra runway.”

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