The head of the Energy Department says solar energy will continue to grow even without federal energy subsidies that begin phasing out at the end of next year.
Energy Secretary Ernest Moniz told reporters Monday that the administration supports the extension of the tax credits for solar, but “I certainly see solar growing” even “without subsidy.”
Moniz said the cost reductions have “been incredible” for the solar industry, making for an improved “value proposition … in many contexts.”
He said the cost of electricity from rooftop solar panels could fall to as low as 6 cents per kilowatt/hour very soon, which makes it “extremely competitive” with natural gas and other fossil and non-fossil power plants.
The administration supports extending renewable energy subsidies indefinitely, but in a Republican-controlled Congress that is likely to be difficult. The Senate Finance Committee this summer passed a measure that would temporarily re-instate important tax credits for wind energy, but did nothing for solar tax credits that phase out at the end of next year.
Moniz’s comments appear to reflect the reality of the situation going into an election year. Moniz said the president will announce Monday the inclusion of $1 billion under the agency’s loan guarantee program to pump up innovation in solar panel technologies.
The action could be seen as an alternative to using tax credits, although the loan guarantees would be limited to advanced technologies that can push rooftop solar panels to the next level.
The departments of Energy and Housing and Urban Development will also collaborate to make rooftop solar panels affordable for low-income consumers.
The Energy Information Administration, the Energy Department’s independent analysis wing, said utility-scale solar energy projects will increase by 100 percent between 2014 and 2016.
It said the enormous growth is partly a reflection of the tax credit phasing out in 2016, and developers wanting to get projects underway before then to take advantage of the credit.
