“I’m of the perspective that I want to pull the Band-Aid off and end all incentives for solar,” said Blake Jones, president and co-owner of Namaste Solar, during the CEO panel of the 2014 Solar Power Colorado conference put on by the Colorado Solar Energy Industries Association (COSEIA). “Including the ITC [i.e., 30 percent Investment Tax Credit]. I’m actually looking forward to the ITC going from 30 percent to 10 percent and wouldn’t mind if it went to zero,” he said.
That’s not what most people expect to hear from a solar installer and advocate. But then it wasn’t quite the normal solar conference. Colorado’s Gov. John Hickenlooper (D) during his keynote speech at the conference jibbed that its hard to get kids coming out of school interested in trades like being electricians. “But to be an electrician doing solar, that’s sexy.”
During the keynote the Governor also said his current home wasn’t ideal for solar, with a north-south roof, but that he’d had it on former homes. Still, the crowd convinced him otherwise. “Goddammit I'll put solar on the house,” he said. However, he added that at his house he’s more likely install solar thermal than PV.
But back to the issue at hand, the phasing out of incentives. The solar industry is set for a major change in 2017 when the ITC falls from covering 30 percent of a solar installation to just 10 percent—if nothing changes.
“I think, as is always the case you hope for the best and plan for the worst,” said Shane Messer vice president of sales at Sun Edison’s RSC North America. “So whenever we look at 2017…we know there a number of things that have to happen and the primary thing that’s going to drive our future is financing mechanisms. It has to be financing mechanisms that operate without the ITC in place.”
Jones explained the thinking his somewhat painful approach to ending incentives: “I’ve had a change of paradigm in the last six months or a year,” the Namaste co-owner said. “I think the first of many of my years of my involvement with solar was fighting for incentives, kicking and screaming when incentives looked like they were going to go down.”
“I think we’ve always had this point where we wanted solar to be independent of subsidies.…and I just want to accelerate that,” Jones said. “We need to bring the cost of solar down even more aggressively than we have and we’ve done a job in the past for many years but I want to do more aggressively. We have to do that anyway.” He also said he is very concerned about the difference in interpretation of tax code and how the ITC should be applied. “I think it’s disrupting the market and I’m ready for that to end. If the ITC ends it will take that problem away with it.”
Similarly Cary Hayes, director of business development with REC Solar said his company was also looking forward to the end of the ITC. REC Solar recently sold its residential solar installation business to SunRun but is keeping its commercial solar business. “From more of a tactical perspective when you look at December 31, 2016, and industry forecasts on the commercial side in some ways we’re super excited about the ITC ending, as we’ve been through rebate drops locally here in Colorado for years, that will drive behavior. It will drive business,” he contended. “We will have to find ways to reduce our costs. Maybe more on the soft costs aspect of the installation side. But I agree with Blake that we do need to live in a world a post ITC world with no incentives to keep going.”
Bryan Conklin, vice president of marketing for residential and small commercial business with RGS Energy, also agreed with the sentiment. But he called for a softer landing, or a glide path. “Maybe we advance and say we'll start a drop now and begin moving toward zero instead of 10 percent, but have that glide path down so we create a sustainable industry,” he said.
Now, let’s see if other energy industries from oil and natural gas to coal and nuclear are ready and willing to give up their subsidies in the U.S.