ORIGINAL REPORTING: U.S. wind, solar finance alternatives

US wind, solar finance alternatives rise as sector rushes against looming tax credit expiration; Resources are being rapidly deployed ahead of the post-2020 phase-out, but political uncertainty makes turmoil unavoidable.

Herman K. Trabish, Oct. 15, 2019 (Utility Dive)

Editor’s note: The renewables industries are beginning to grow nostalgic for the days when all they had to worry about was their tax credits. But the good old days will return. Keep the faith.

Expiring tax credits for wind and solar projects offer near-term promise and long-term uncertainty, with the U.S. wind industry on track to become the nation's fastest growing source of electricity generation by the end of 2020 and the solar industry potentially soon following.

Both face bursting bubbles due to the loss of tax incentives, analysts told Utility Dive. But the resources have other advantages and ideas are emerging on how to finance the projects, which could propel them into the next decade.

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One developing finance approach would take advantage of potentially "billions of dollars" waiting to go into U.S. wind and solar projects from foreign and other investors without a use for tax credits. Another would channel investor funds to portfolios of smaller wind and solar projects that are more difficult to manage when tax credits have to be apportioned within the portfolio.

Alternatively, a range of new technology-neutral tax credit proposals could incline lawmakers to establish long-term certainty for innovative resources that would open the way to a renewed power sector. But first, money is expected to flow like never before to wind projects through 2020 and to solar projects in the early 2020s to take advantage of existing tax credits one last time.

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Wind's 14% year-on-year growth forecast for 2020, driven by a rush to get projects underway before the terminating federal production tax credit (PTC), is not sustainable, analysts and advocates told Utility Dive. Momentum is likely to shift to solar energy before its federal investment tax credit (ITC) starts phasing out in 2022.

Amid rapidly evolving political and industry developments, innovative policy proposals are emerging for wind and solar, Utility Dive recently reported. One, for technology neutral tax incentives that would create a level playing field for all sources of electricity generation, continues to attract support. But bubbles will burst before these valuable post-2020 ideas are put in place, analysts said… click here for more

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