Schwarzenegger Tours Solar Panel Roof Of A Sam's Club

Now it’s solar’s turn.

Just as wind energy has used reports of industry success as a platform to argue for a production tax credit extension, the U.S. solar industry is now playing the investment tax credit card, saying record-breaking growth – 6.2 gigawatts (DC) installed in 2014, a 30 percent increase over 2013’s total, according to data revealed on Tuesday – could be in jeopardy if the solar ITC falls off in 2017 as scheduled.

Since 2006, a 30 percent tax credit has helped drive U.S. solar growth, pushing PV from practically nothing to 18.3 GW of installed capacity. Another 2.2 GW of concentrating solar power puts the industry over the 20 GW mark, along with only Germany (38.2 GW), China (26.5 GW) and Japan (estimated 23 GW).

danko seia chart 1Source: SEIA/GTM Research

The ITC has hardly been the only factor in solar’s growth – rapidly falling costs and industry maturity have also played roles. Still, nearly two years before the ITC is set to drop from 30 percent to 10 percent for commercial solar and to zero on the residential side, the Solar Energy Industries Association has begun fighting in earnest for an extension.

SEIA President and CEO Rhone Resch teed up the ITC campaign on Monday, playing off recent reports of robust job growth in the solar sector.  “The reality is that we will lose 100,000 jobs if we lose the ITC – and these are conservative numbers. Ninety percent of solar companies will go out of business,” he told a conference in Boston.

danko seia chart 2Source: SEIA/GTM Research

In the annual report issued Tuesday with the firm GTM Research, SEIA said the utility-scale sector was the biggest solar player in 2014, again, accounting for 3,934 MW, up 38 percent from 2013. But “its fate after the 2017 ITC expiration remains in doubt,” the group said, adding:

“Businesses across the solar energy industry have begun preparing for the worst while hoping for the best. In general, solar businesses will try to bring as much capacity online as possible before the scheduled stepdown. Solar development will continue, but some markets will fare better than others and resumption of growth after 2017 will look different from the growth seen over the past eight years…. (S)ome states will fall off the solar map entirely…”

So in a perverse way, fear of a diminished or absent ITC will be a factor in pumping up installations in the short-term, particularly on the utility-scale front, where some 14 GW of projects are in the pipeline. “The next two years will see a flurry of project completion announcements and unprecedented installation figures from the utility solar sector,” the SEIA/GTM report said.

Across all sectors for 2015, SEIA/GTM forecast new installations of 8.1 GW, a 31 percent increase over 2014’s total.

While big solar has been and will remain the largest single solar segment, fierce expansion has come on the roofs of homes as well – for the third year in a row, residential growth topped 50 percent in 2014. Annual residential installations cracked a gigawatt for the first time, at 1.2 GW.

But even there the industry was warning of possible peril ahead, apart from whatever the ITC disposition might bring, as threatened utilities push back on solar.

“(T)here are more than 20 ongoing proceedings that could impact residential solar’s value proposition through either changes to net energy metering or electricity rate structures,” SEIA/GTM said. “2015 will be the year in which some of the most prominent proceedings (most notably California’s AB 327) start to see resolution, while new debates will undoubtedly emerge.”