Implications of Scheduled ITC Reversion for RPS Compliance: Preliminary Results

This poster presents DRAFT initial results of a forthcoming NREL analysis. The analysis investigates the impacts of the scheduled investment tax credit (ITC) reversion from 30 percent to 10 percent for certain solar photovoltaic projects. Specifically, it considers whether the reversion will result in increased use of alternative compliance payments (ACPs) in lieu of solar renewable energy credits (SRECs) for renewable portfolio standard (RPS) compliance. The analysis models the effect of a 10 percent ITC on power purchase agreement (PPA) prices for non-residential systems in the eight states with solar carve-outs and solar ACPs. Our preliminary results suggest that states will likely install sufficient capacity to meet long-term targets through SRECs rather than ACPs following the ITC reversion. However, the analysis shows that the ITC reversion could affect project economics such that capacity shortfalls in certain states could temporarily increase the use of ACPs. NREL anticipates publishing a full report of this analysis in fall 2015. credits (SRECs) for renewable portfolio standard (RPS) compliance. The analysis models the effect of a 10 percent ITC on power purchase agreement (PPA) prices for non-residential systems in the eight states with solar carve-outs and solar ACPs. Our preliminary results suggest that states will likely install sufficient capacity to meet long-term targets through SRECs rather than ACPs following the ITC reversion. However, the analysis shows that the ITC reversion could affect project economics such that capacity shortfalls in certain states could temporarily increase the use of ACPs. NREL anticipates publishing a full report of this analysis in fall 2015.