Federal Policy Propels U.S. Solar Energy Industry
In 2007, the U.S. solar energy industry saw a glimpse of a gigawatt future. There was signi?cant growth in the commercial and residential PV markets and a new utility-scale segment for PV emerged with the fastest growth of all segments representing over 15 percent of the annual U.S. installed PV capacity. The ?rst concentrating solar power plant was built in more than 15 years with dozens more utility-scale projects in the pipeline. The expansion of the solar water heating market continued. Thousands of U.S. jobs were created and billions of dollars were invested. And, the industry strengthened its presence in Washington and our united coalition support across the country.
Solar continues to provide a cost-effective solution for daytime energy needs as well as provide peak shaving bene?ts. But for all the potential, the industry continues to face a growing threat. As the year ended, Congress had failed to pass an extension of the investment tax credit, putting at risk much of the progress that the industry has experienced in the last two years. While analysts have acknowledged recent growth and remain bullish about the future of solar energy, this growth will be disrupted if the solar ITC expires in December. Indeed, many larger projects are already being put on hold. The industry remains determined to pass an extension of the ITC as soon as possible.
Bringing Solar Power to Market
The U.S. possesses the best solar resources in the world and yet Germany installs 8 times as much PV as the U.S. because Germany has provided generous incentives that stimulate demand for solar energy. In the past few years, the U.S. saw new major solar federal and state programs emerge as well.
In the 2005 EPAct, the U.S. created the first residential tax credits for solar energyin almost 20 years and significantly expanded the commercial tax credits. These credits started on January 1, 2006 and have expanded markets for all solar technologies, but unless these credits are extended beyond December, 2008, their long-term impact will be limited.
In 2006, the state of California enacted the largest solar program outside of Germany through the passage of the California Solar Initiative on January 12 by the CPUC and the Million Solar Roofs Bill signed into law on August 21st. These programs target installing 3,000 MW of electricity capacity in the next ten years (see CSI box). Eight other states improved programs this year that expand incentives or require the use of solar as part of their renewable portfolio standard (see box below). Twenty-five states and the District of Columbia now have mandatory renewable portfolio standards, with 12 of the programs having specific solar or distributed generation set-asides.
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