US Aims to Achieve 40% Solar Power Supply by 2035 Through Preferential Tax Policy

published: 2021-09-20 9:30 | editor: | category: News

According to a memorandum announced by the US Department of Energy last month, the approval of the preferential tax policy on renewable energy programs and module makers by the US Congress may amplify the intensity for the deployment of renewable energy, and the ratio of solar power generation is likely to rise from the existing 3% to 40% in 2035.

Biden’s administration has been vigorously implementing renewable energy since taking office, and aims to achieve a comprehensive decarbonization in the power system by 2035, which is expected to introduce several millions of high-paying job vacancies. The memorandum of the US Department of Energy quotes the analysis of the National Renewable Energy Laboratory (NREL), which denotes that solar energy needs to grow at 3-4 times the speed in order to propel solar installed capacity and contribute to almost half of the power generation in the country, and is expected to create 1.5 million job opportunities.

The US Senate also approved an infrastructure scheme that is worth US$1 trillion in early August, which encourages the development of solar power through grid modernization. The White House is also focusing on tax exemption and the green energy payment plan of utility power companies, and will be incorporating them into another US$3.5 trillion program believing that they are able to accelerate the progress of the green energy industry.

Gina McCarthy, the White House National Climate Advisor, commented that the preferential tax policy on renewable energy will accelerate the production and manufacturing industry. Solar schemes currently enjoy a 26% tax discount, though the preferential plan is about to make its way out, and for that Biden is currently trying to extend the particular implementation for another 10 years, alongside a new incentive for solar production at the same time.

Despite the vast potential in job opportunities for the solar industry, no one is certain if it does indeed offer attainable and high-paying “dream jobs”. As the memorandum pointed out, the creation of job opportunities remains an area that needs refinement for solar power, while the performance on solar is also not as good as that of other energy industries.

The cost of solar systems depends on the scale, direct purchase or lease, and the local electricity prices, though the LCOE of solar power has reduced by 70% over the past decade, and now the goal of the US Department of Energy is to lower the LCOE of residential solar from US$0.5/kWh in 2010 to $0.05/kWh in 2030. For commercial solar systems and major utility companies, the goal is to reduce the LCOE from US$0.39/kWh to US$0.04/kWh and from US$0.27/kWh to US$0.02/kWh, respectively. Hence, the cost of solar will only continue to decrease.

 (Cover photo source: pixabay)

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