Solar could be 40% of US generation by 2035 but requires more investment, White House finds

Solar could be 40% of US generation by 2035 but requires more investment, White House finds

• The White House released a report last week that stated that solar power could account for 40% of all U.S. electrical generation by 2035. This would create up to 1.5 million jobs in the process.
• The United States must deploy solar three to four times faster than it is currently in order to decarbonize the grid by 2035, according to a recent report. Congressional extensions of investment and production tax credits could help increase this rate of deployment, as could new incentives for storage and transmission projects, the report says.
• Industry groups that work with solar energy praised the report for highlighting the industry's growth and potential. They expressed optimism that it signals potential reforms to tax policy and other potential incentives.

Solar energy is important for making the United States' electric grid more environmentally friendly. The White House report says that solar energy will only become more important if the rate of solar deployment and investment increases.

According to a new report, in order to reduce carbon emissions by 2035, the deployment of solar energy must increase by 3-4 times its current rate. The report also suggests several actions that Congress can take to help achieve this goal, including extending investment and production tax credits, creating new incentives for transmission and storage projects, and promoting community and residential solar initiatives for low- and moderate-income households.

"It's good news that the Biden administration is continuing to prioritize transitioning to a renewable energy economy," said Gregory Wetstone, president and CEO of the American Council on Renewable Energy (ACORE), in a statement. "As the report makes clear, if we want to take advantage of this growth opportunity, there needs to be a rapid transformation of the power sector and significant investment in a 21st century grid. But the payoff will be both climate protection and greater economic prosperity."

Tax reform will be critical in achieving the White House's goals. Moving the renewable sector beyond stopgap measures to a stable platform will help decarbonize the economy and put Americans back to work.

Alisa Petersen, manager of RMI's U.S. program, said that although investor-owned utilities, municipalities and co-ops own 55% of the U.S.'s generating capacity, they currently only own 11% of utility-scale solar installations. She said that creating a direct pay tax credit would create more credit flexibility and allow these organizations to deploy more solar resources. One analysis, she said, projected that creating a solar production tax credit with a direct pay option would double emissions reductions, compared to extending the full value of existing credits.

The Solar Energy Industries Association (SEIA) also called for attention to trade policy while praising the report. In a note sent to SEIA members on Tuesday, SEIA president and CEO Abigail Roth Hopper noted that four companies have filed petitions for new tariffs on solar cell and module imports from Malaysia, Vietnam and Thailand.

"The harmful impact of new trade petitions and CBP enforcement action on our industry cannot be underestimated," she wrote. "SEIA will continue to oppose any unfair trade actions that hinder our ability to meet critical climate goals."