Renewable Energy and Related Services: Recent Developments

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requirements that a share of this electricity come from solar and/or other distributed energy sources.25  Other state policies: States have implemented a number of laws, including rebates and tax incentives, that have helped spur PV installations.26 For example, the CSI provides rebates for customers of investor-owned utilities in California, and Hawaii offers a 35 percent tax credit (with a maximum of $5,000 for each 5 kW installed).27 Net metering rules also play a role in enabling the growth of distributed generation.28  Federal government policies: Another driver of PV market growth has been federal government policies. One of the primary federal government incentives for PV is the investment tax credit (ITC), which is a tax credit equivalent to 30 percent of the cost of a solar installation. For projects completed or under construction during 2009–11, developers could also opt to receive a payment equal to the amount of the ITC rather than taking the credit.29 Many solar projects are also eligible for five-year accelerated depreciation and first-year bonus depreciation.30  Other: A number of other factors are also contributing to the PV market growth. The increasing range of financing options may increase the deployment of PV by removing the barrier of high up-front costs, making financing easier to access and enabling some customers to use tax credits more easily.31 Environmental concerns can help to motivate the installation of PV systems, though they are generally less important than cost.32 Other factors include relatively short construction times, the ability to locate solar 25 Distributed energy sources are typically systems installed close to energy demand, such as those installed at homes and businesses; as noted earlier, they generally include residential and nonresidential PV systems. North Carolina Solar Center, DSIRE, “Renewable Portfolio Standard Policies,” February 2013; North Carolina Solar Center, DSIRE, “Renewable Portfolio Standard Policies with Solar/Distributed Generation Provisions,” February 2013; Real Goods Solar, “Form 10-K,” March 15, 2012, 5–6; Sherwood, “Market Prospects for Solar in North America,” October 18, 2011; Kann, “The U.S. PV Market,” October 18, 2011; Gibson, “Electric Utilities and Solar: Threat or Opportunity?” April 26, 2011; SolarCity, “Form S-1,” October 5, 2012, 12; First Solar, “Form 10-K,” February 27, 2013, 9. 26 Sherwood, “Market Prospects for Solar in North America,” October 18, 2011; Sherwood, “Big Time for Solar,” July/August 2013, 40-41; SolarCity, “Form S-1,” October 5, 2012, 14, 108. 27 Go Solar California website, http://www.gosolarcalifornia.ca.gov/about/csi.php (accessed March 4, 2013); Yonan, “State Unveils New Rules,” November 9, 2012. 28 SolarCity, “Form S-1,” October 5, 2012, 13–14; First Solar, “Form 10-K,” February 27, 2013, 9. 29 If a system (1) was placed in service during 2009–11, or (2) the developer started construction during 2009–11, submitted the application by October 1, 2012, and will complete the system before 2017, the developer could elect to receive a payment equal to the amount of the tax credit, rather than taking the ITC. This payment was commonly known as the ITC grant or grant in lieu of the ITC. Sherwood, “Utility-Scale Installations Lead Growth,” July/August 2011, 31; industry representative, interview by USITC staff, October 23, 2012; Sherwood, “Market Prospects for Solar in North America,” October 18, 2011; Sherwood, “Big Time for Solar,” July/August 2012, 40–41; SEIA website, http://www.seia.org/policy/finance-tax/solar- investment-tax-credit (accessed March 4, 2013); U.S. Treasury, “Payments for Specified Energy Property,” April 2011; SolarCity, “Form S-1,” October 5, 2012, 14; First Solar, “Form 10-K,” February 27, 2013, 9. 30 SolarCity, “Form S-1,” October 5, 2012, 95, 108; Ardani and Margolis, 2010 Solar Technologies Market Report, November 2011, 83–84; REC website, http://www.recsolar.com/bonus-depreciation (accessed March 5, 2013); IRS, How to Depreciate Property, February 15, 2013. 31 Industry representatives, interviews by USITC staff, October 22, 2012, October 23, 2012, December 19, 2012, and February 6, 2013; Bosworth, “Split Ends,” April 2012, 57. 32 SEPA, Photovoltaic Incentive Programs Survey, November 2009, 9; Wesoff, “What Really Motivates Consumers to Install Residential Solar?” March 23, 2011; Itron and Kema, CPUC California Solar Initiative, June 2010, 11-3, 11-8, 11-21 to 11-22; Shelton Group survey cited in Crume, Crume, and Koshmrl, “Selling Solar,” April 2011, 32. 3-10

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