BTW: Did you read the GTM article on the draft proposal for the tax credit extension?
"The ITC -- a 30 percent credit for utility, commercial and rooftop solar installations -- would get phased down through 2022. The credit would stay at 30 percent through 2019, and then fall to 26 percent in 2020. It would drop to 22 percent in 2021 and 10 percent in 2022. The bill also offers a commence-construction clause that would extend the credit to any project in development before 2024."
The installed cost is dropping by about 25% every two years. So by the time the tax credit drops to 26% in 2020, the current ~$3.40/watt average US price in Q4 2015 will have already dropped to under 2 bucks. (It's already below that in well developed markets like Australia, using the same panels, inverters & racking systems, so it may be substantially cheaper well before then.) At $2/watt with a 26% tax kickback in Y2020 you're at less than $1.50 out of pocket. At that price point net metered residential solar becomes a no-brainer kind of investment at MA utility prices, even without another round of SREC kick backs. When the SREC-I was being implemented the installed cost of residential PV in MA was $9-12/watt, which really needed that subsidy to pencil out. Now it's $3-4/watt, down from $4-5/watt just 20 months ago.
So if the income tax credit extension flies through the US Congress without substantial changes, it's then up to the MA legislature to figure out how to stage the stepping back from net-metering, and there are plenty of competing power generating industry flies buzzing around that ointment, some of whom have the ear of Matt Beaton and Charlie Baker. Clarity on where this is going is lacking, but something will surely be hammered out in the next legislative session. Stay tuned...
IMHO the simple cap mechanism that expires when the limits are hit is a complete loser of a policy, as is setting rates with high fixed monthly charges (that some Australian utilities are going after, as well as in Arizona.) A staged approach where the net metered payout is reduced incrementally, based on the fraction of the total power on the MA grid coming from solar, and NOT on fraction of the historical peak power (like the current caps) or calendar boundaries (like the income tax credit), makes the most sense. At the end stage the tariff returned for exported PV would be the spot-wholesale price (not some averaged wholesale price). When the installed cost of PV is a buck a watt (and it's coming, probably before 2030), there will be excess mid-day power on sunny days, which drops the wholesale price, but also encourages self-consumption to limit how much expensive power is drawn from the grid.
Electric cars and smart car-chargers are just one solution to that excess mid-day power problem, and that's coming too. (Ford will have more than 15 plug-in cars on the US market by 2020.) But behind-the meter residential batteries works too, in markets where the wholesale price paid is a pittance, and the grid-power price is high, which is currently the case in Australia. The high retail electricity prices there have resulted in a double-digit percentage of households with rooftop PV, and now that utilities are fighting for high fixed monthly charges and very low tariffs for PV power to recover their sunk costs in overbuilt grid and generating capacity, the home battery market has already cleared the launch pad on it's way to outer space, since the lifecycle cost of battery + PV in Australia is lower than retail utility pricing. People may not quit the grid entirely, but the fraction of their PV they export at 0-8 cents/kwh is going to drop precipitously in the next few years, since buying the same amount of power back overnight at 35 cents feels like a gouge (and is.) Battery costs are plummeting too. |