After the successful extension of the US Investment Tax Credit, the US solar industry is expected to increase 60% in 2016.
Analytics firm IHS has released new figures which predict US solar PV installations to grow 60% year-over-year, with an expected 15 GW installed in 2016. A strong demand for utility-scale solar PV will drive growth in 2016, and will be boosted by the multi-year extension to the much sought-after Investment Tax Credit (ITC), which was announced in the middle of December.
“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 US solar industry,” said 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.”
With the extension of the ITC — as well as the Production Tax Credit — the entire US renewable energy industry is expecting strong growth over the next several years.
This is nowhere more obvious than in the US solar PV industry, which currently has a 50 GW pipeline of commercial and utility-scale solar PV projects expected to come online during 2016 to 2019. All solar PV segments are expected to benefit somewhat from the extension to the ITC, but utility-scale PV will benefit for most, and according to IHS will account for over half of newly added capacity between 2016 and 2019.
“Residential and commercial PV will experience sustained growth through the forecast period,” Barati said, “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.”
IHS is predicting that the country’s PV market will decline in 2017 by approximately 30% due to lower demand for utility-scale PV. However, the good news is that following 2017, demand is expected to grow through the remainder of the forecast period.
Of particular interest, though, is that the Northeastern region of the US is not expected to suffer any decline in PV demand, due to a lower reliance upon utility-scale PV and a higher proportion of residential and commercial solar PV demand.