Solar installations have steadily increased over the past five years, but all of that growth is coming to a quick end as projections for next year show new panels will only increase by 0.3 percent. Oddly enough, as Bloomberg reports, it seems that the extension of a solar tax credit—an absolutely critical incentive for consumers to install panels—is to blame for this taper:
In December, Congress unexpectedly extended a tax credit set to expire at the end of 2016. Panel buyers will get reimbursed for 30 percent of the cost of new solar panels through 2019 and at least 22 percent through 2021.
Yet instead of energizing the industry, the extension has hurt growth, as solar companies no longer rush to meet a deadline. After jumping more than 1,000 percent since 2010, panel installations are projected to grow by only 0.3 percent in 2017, according to Bloomberg New Energy Finance. Faced with the industry’s first major slowdown, companies are figuring out their next move. “You’re selling the urgency to get in while the tax credits are available,” says Hugh Bromley, an analyst at BNEF. “Once you have long-term subsidy certainty, solar companies may struggle to reimagine their sales pitches.”
This is not the sign of a healthy market. Greens will happily point to the rapid rise in solar installations as a sign that the renewable energy source’s day in the sun has finally arrived, but the fact that it can’t compete with fossil fuels without extensive government support—and that it can’t continue to grow without the looming specter of that support falling off—suggests that we’ll have to keep waiting for solar’s time to shine.