Solar Sees Growth But Clouds Loom
It has been a good year for solar so far. The Ivanpah project is only a part of the 900 MW of concentrating-solar power capacity expected to be commissioned in the U.S. in 2013, according to the "U.S. Solar Market Insight Q1 Report" published by the Solar Energy Industries Association (SEIA), a solar advocacy organization. But the rise in concentrating-solar and photovoltaic (PV) projects may represent a rush to secure a crucial federal tax credit before it expires in 2016.
Introduced in 2006, the Renewable Energy Investment Tax Credit (ITC) grants a 30% credit on new solar, fuel-cell and small wind-power projects. The solar credit is particularly attractive because the 30% applies to total installation costs, with no maximum credit. Today, it covers all solar projects on line by the end of 2016. Congress has yet to decide whether to extend the credit.
"Simply put, the ITC has been a huge success," said Ken Johnson, SEIA vice president. "The cost of a solar system has dropped by nearly 40% over the past two years. The ITC has played a key role in making this success possible, and we're spreading that message throughout the halls of Congress."
In PV, the steepest drop in installation costs has been in small-scale systems, but larger PV is coming down, too. In the 2013 edition of Berkeley National Laboratory's "Tracking the Sun" annual report, researchers found that installation prices for PV larger than 100 kW are down 6% from the previous year to $4.60/W. Utility-scale PV project prices ranged from $2.30/W to $6.80/W.
Even with PV prices decreasing, Johnson sees promise for concentrating solar in the utility market. "SEIA continues to believe that concentrated-solar power [CSP] has a bright future. Today, more than 30 utility-scale, clean-energy solar projects are under construction, including CSP. We are on track to reach SEIA's goal of having 10 GW of solar installed on an annual basis by 2015."