ITC Extension Will Help U.S. Solar Reach Record Levels This Year: IHS Report


With the recent multiyear extension of the investment tax credit (ITC) in the U.S., solar photovoltaic installations will grow 60% year-over-year, reaching 15 GW in 2016, according to a report from IHS Inc.

The report says PV installations in the U.S. will reach record levels this year, primarily due to strong demand for utility-scale solar, and the West and Southwest will account for the majority (65%) of total demand.

“The extension of the tax credit relieves pressure on the industry to complete projects ahead of the 2016 deadline and breathes new life into the U.S. solar industry,” comments Camron Barati, North America solar analyst for IHS Technology. “Many feared the solar industry in the United States, which has experienced tremendous growth over the last several years, might collapse in 2017 without an extension of the ITC.”

The report says the U.S. currently has a 50 GW pipeline of commercial- and utility-scale PV projects from 2016 to 2019. Although all market segments are expected to benefit from the ITC extension, utility-scale PV is expected to benefit most and account for over half of newly added capacity from 2016 to 2019.


“Residential and commercial PV will experience sustained growth through the forecast period,” Barati says. “But mounting pressure from utilities to revise retail net-metering rates and the falling cost of large-scale generation will limit growth opportunities in the U.S. outside of well-established state markets.”

In 2017, the report says the U.S. PV market will decline by 30% due to lower demand for utility-scale PV, but it will grow every year through the remainder of the forecast period. The Northeast will be the only region in the country that will not experience a decline in 2017, due to a lower reliance on utility-scale PV demand and a higher proportion of residential and commercial PV demand.

Furthermore, IHS has identified three U.S. states that are projected to install over 1 GW this year: California, Nevada and Texas.

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