Lund and Nese Discuss Prospects for Federal Support for Solar

"The fate of the U.S. solar energy industry likely rests with a handful of states rather than the federal government. Under a likely scenario, policies and local energy prices in those states would continue to expand the solar industry for years to come, regardless of any likely federal action."

—Morten Lund and Brian Nese in Solar Industry.

Attorneys Morten Lund and Brian Nese authored an article for Solar Industry magazine titled “What If Federal Support For Solar Disappears?” The article discusses how the solar energy industry, which has been enjoying strong year-over-year growth for the past several years, might fair  in the U.S. in light of the results of the 2016 election. 

The authors address what may happen on a federal level that will be detrimental or beneficial for solar energy. On the downside, the new administration will likely dismantle the Clean Power Plan and is unlikely to establish a carbon tax or similar carbon policy. On the upside, for the time being federal policies remain in place that encourage the creation of solar projects: the investment tax credit (ITC) and accelerated depreciation (MACRS), first and foremost. 

The authors note that any changes made to the ITC that decrease its effectiveness will likely be offset by actions taken by state and local governments, “not necessarily through tax incentives but through other programs and policies within the scope of their powers.” 

Finally, Lund and Nese address state-level drivers for encouraging renewable energy projects, the most important of which is the renewable portfolio standard (RPS), laws that require utilities to obtain some amount of their energy or capacity from renewable energy resources, and which 29 states (plus Washington, D.C., and three U.S. territories) currently have. 

Their conclusion is hopeful: “Federal policy changes may slow or hinder growth in second-tier solar states, as well as geographic expansion to new markets – but the solar industry is too mature and too well supported where it matters to be crippled by any reasonable action at the federal level.”