What Just Happened in Solar Is a Bigger Deal Than Oil Exports

[jimmy olsen]

Fantastic news!

http://www.bloomberg.com/news/articles/2015-12-17/what-just-happened-to-solar-and-wind-is-a-really-big-deal

What Just Happened in Solar Is a Bigger Deal Than Oil Exports

The impact: $73 billion in new investment in the U.S.

The clean-energy boom is about to be transformed. In a surprise move, U.S. lawmakers agreed to extend tax credits for solar and wind for another five years. This will give an unprecedented boost to the industry and change the course of deployment in the U.S.

The extension will add an extra 20 gigawatts of solar power—more than every panel ever installed in the U.S. prior to 2015, according to Bloomberg New Energy Finance (BNEF). The U.S. was already one of the world's biggest clean-energy investors. This deal is like adding another America of solar power into the mix.

The wind credit will contribute another 19 gigawatts over five years. Combined, the extensions will spur more than $73 billion of investment and supply enough electricity to power 8 million U.S. homes, according to BNEF.

"This is massive," said Ethan Zindler, head of U.S. policy analysis at BNEF. In the short term, the deal will speed up the shift from fossil fuels more than the global climate deal struck this month in Paris and more than Barack Obama's Clean Power Plan that regulates coal plants, Zindler said.

This is exactly the sort of bridge the industry needed. The costs of installing wind and solar power have dropped precipitously—by more than 90 percent since the original tax credits took effect—but in most places coal and natural gas are still cheaper than unsubsidized renewables. By the time the new tax credit expires, solar and wind will be the cheapest forms of new electricity in many states across the U.S.

The tax credits, valued at about $25 billion over five years, will drive $38 billion of investment in solar and $35 billion in wind through 2021, according to BNEF. The scale of the new projects will help push costs down further and will stimulate new investment that lasts beyond the extension of the credits.

Few people in the industry expected a five-year extension. Stocks soared. SolarCity, the biggest rooftop installer, surged 34 percent yesterday. SunEdison, the largest renewable-energy developer, climbed 25 percent, and panelmaker SunPower increased 14 percent.




Congress is expected to vote by the end of this week on the tax credits as part of a broader budget deal that also lifts the 40-year-old ban on U.S. oil exports. Oil producers have lobbied for years to lift the ban, but it isn't likely to significantly affect either consumption of oil or deployment of renewables. Leaders from both parties reached an agreement on the bill late Tuesday. 

The 30 percent solar tax credit was set to expire next year and will now extend through 2019 before tapering to 10 percent in 2022. The wind credit had expired at the end of 2014, and the extension will be retroactively applied from the start of 2015 through 2019, declining in value each year.

Wind power has had an especially tumultuous relationship with U.S. lawmakers, who have kept the industry's credits alive through a disruptive ping-pong game of short-term extensions every year or two. "You open manufacturing plants and then you close them. And then you open them and you close them," BNEF's Zindler said. "It's economically inefficient. This will give them a good five-year line of sight on what the market will look like, and that's really important."

[Zanza]

Good.

[Valmy]

Hey Spicey...might this create: Green Jobs?

At the recent conference I attended the solar and wind people are pretty damn salty these days, they know they are about to make billions. They knew even if the tax credit went away they were in great shape.

[The Brain]

We need more nuclear.

[Tonitrus]

We need more nuclear.

Isn't the sun nuclear?

[Richard Hakluyt]

I can imagine solar being quite useful in parts of the USA. eg Texas in summer when the need for aircon and lots of sunshine coincide. In the UK solar's contribution is confined to periods of well below peak demand, so it just undercuts baseload producers at those times.

[Tonitrus]

Yeah, I think the real breakthrough for solar will come when we finally, if ever, develop a very efficient means of being able to store energy in a somewhat dormant state (which really, is why fossil fuels have served us so well) for long periods of time.

What we really need are energon cubes.

[The Brain]

We need more nuclear.

Isn't the sun nuclear?

No it's wholesome and natural, not evil.

[celedhring]

Wow even Bloomberg is using clickbait-style headlines now? 

What's wrong with "Congress to extend green energy tax credits"?

[MadImmortalMan]

Solar panels on the roof is a big boom here. A fad, even. It's too bad all the solar companies are crap because I'd be investing in it otherwise.

[crazy canuck]

Wow even Bloomberg is using clickbait-style headlines now? 

What's wrong with "Congress to extend green energy tax credits"?

Yeah, not to mention hyperbole.  I am not sure why extending an existing tax credit can be characterized as "an unprecedented boost to the industry".   

[Malthus]

"Unprecedentedly boost solar energy with this one weird trick"

[The Minsky Moment]

Wow even Bloomberg is using clickbait-style headlines now? 

What's wrong with "Congress to extend green energy tax credits"?

Yeah, not to mention hyperbole.  I am not sure why extending an existing tax credit can be characterized as "an unprecedented boost to the industry".

"Unprecedented" is obviously wrong; however the extension is a pretty big deal for the industry.

[Admiral Yi]

Hey Spicey...might this create: Green Jobs?

At the recent conference I attended the solar and wind people are pretty damn salty these days, they know they are about to make billions. They knew even if the tax credit went away they were in great shape.

So the credits are too big, and the same could have been achieved with smaller credits.

[derspiess]

Hey Spicey...might this create: Green Jobs?

Damned straight.  And Spiessyndra Industries is fully prepared to get its hands on some of that government sugar.