House bill would extend solar credit into 2021

Spanish Market: Electricity, Emissions
20/05/15

Democrats in US House of Representatives yesterday introduced legislation to extend the federal investment tax credit for solar energy projects for five years.

The bill, introduced by representative Mike Thompson (D-California), would prevent the credit for commercial and utility-scale projects from declining to 10pc from 30pc at the end of 2016 and extend it through 2021. It would also extend the credit for residential projects, which is due to expire at the end 2021. The bill, dubbed the New Energy for America Act, has 21 Democrats as co-sponsors in the Republican-controlled House.

Extending the credit through 2021 coincides with when analysts expect solar generation to achieve grid parity with conventional fossil fuel-fired generation without the support of the tax credit, Thompson said.

"The credit is one of the most important tools we have that supports the deployment of solar energy in the US," he said.

While renewable energy tax credits generally have bipartisan support, the five-year extension likely faces a tough path forward in the House, where the Republican majority has generally been less inclined to support such incentives than their Senate counterparts.

Since the tax credit first took effect in 2006, the US has added 97pc of its entire solar capacity, or about 19.5GW, according to the Solar Energy Industries Association (SEIA).

If the credit declines or expires after 2016, state policies will likely play a greater role in supporting solar. State tax credits have provided an added boost where the absence of the federal credit would otherwise make a project impractical, particularly in Arizona, Hawaii, Maryland, New Mexico and New York, according to UBS analysts.

"We see a growing reliance on state-level tax credits to sustain the solar industry," UBS power and utilities analyst Julien Dumoulin-Smith said in a recent report. "We flag the recent low $42/MWh price in New Mexico for large-scale solar by [NextEra Energy] as illustrative of economics benefiting from state-specific credits."

But such a price is not always obtainable, especially at the residential level, where distributed solar systems have become a strategic growth area for the power industry as it moves to decarbonize in the coming years. SolarCity, for example, has a competitive blended average contract price across its 17 state markets at about $130/MWh, the company said today.

The company said positive regulatory developments in California, New York, Massachusetts and Hawaii will help expand its residential penetration based on solar policy drivers alone.

lb/ee

Send comments to feedback@argusmedia.com

Request more information about Argus' energy and commodity news, data and analysis services.

Related news posts

Argus illuminates the markets by putting a lens on the areas that matter most to you. The market news and commentary we publish reveals vital insights that enable you to make stronger, well-informed decisions. Explore a selection of news stories related to this one.

07/05/25

Australia’s CER sees disinterest in carbon trading tool

Sydney, 7 May (Argus) — Australia's Clean Energy Regulator (CER) plans to work with existing carbon credit trading platforms to potentially link them to its new registry, following a lack of market interest in a carbon credit trading tool proposed late last year. The CER did not see "a lot of enthusiasm" for the use of a financial instrument developed by the Australian Securities Exchange (ASX) as a trading model for Australian Carbon Credit Units (ACCUs), chair and chief executive David Parker said on 7 May at lobby group Carbon Market Institute (CMI)'s Carbon Farming Industry Forum in New South Wales, Australia. "What people did say was that they wanted us building up infrastructure… linking [over-the-counter] trading platforms into our new registry," Parker noted. The CER had previously planned to develop and operate the so-called Australian Carbon Exchange for spot ACCU transactions, but had already indicated it pushed back on the idea when it consulted on the trading tool late last year. Its proposal would see participants using a Clearing House Electronic Subregister System (CHESS) Depository Interest (CDI) — a mechanism used by the ASX to allow the trading of interests in bonds and some international shares on the exchange. Under the proposed model, market participants would not be required to have a registry account to buy beneficial interests in ACCUs through CDIs. They would be able to trade the CDIs multiple times and would only need registry accounts if they needed to convert the CDIs into ACCUs for actual delivery. Currently, climate solutions and markets firm Core Markets, brokerage firm Jarden, and environmental marketplace Xpansiv's CBL each have separate trading platforms for ACCUs. Exchanges ASX and CME last year launched separate futures contracts for physically-deliverable ACCUs, although trading interest has been very limited so far. Core Markets is working on developing its platform so that it would be able to potentially link to the CER's registry in the future, chief executive Chris Halliwell told Argus on the sidelines of the event on 7 May. The CER launched its new registry late last year. It started issuing the new safeguard mechanism credit units into the new registry, and plans to transfer ACCUs from the existing Australian National Registry of Emissions Units later this year. New units and certificates such as renewable energy guarantees of origin and biodiversity certificates under the nature repair market will be added to the new registry, while large-scale generation certificates and small-scale technology certificates will continue in the renewable energy certificate registry. By Juan Weik Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

US EIA will not release international outlook in 2025

06/05/25

US EIA will not release international outlook in 2025

Washington, 6 May (Argus) — The US Energy Information Administration (EIA) no longer expects to publish one of its major energy reports this year after losing some of its staff through President Donald Trump's efforts to downsize the federal workforce. The EIA does not plan to publish its International Energy Outlook (IEA) — which models long-term global trends in energy supply and demand — this year because of a loss of staff responsible for producing the report, according to an internal email initially reported by the news outlet ProPublica . The EIA confirmed the authenticity of the email. "At this point, you can assume that we will not be releasing the IEO this year," the EIA's Office of Energy Analysis assistant administrator Angelina LaRose wrote in the 16 April email. "This was a difficult decision based on the loss of key resources." Oil and gas producers, traders, utility companies, federal regulators and foreign governments have come to rely on the data and models from the EIA, an independent agency within the US Department of Energy. The 2025 version of the IEO might still be published early next year, the EIA said. The agency for now is focusing on trying to "preserve as much institutional knowledge as possible" with an "all hands-on deck" effort under which remaining staff will document models and procedures on long-term modeling, LaRose wrote in the email. Trump and his administration have worked to cut the size of the government's workforce through voluntary buyouts and a process known as a reduction in force. The EIA has yet to say how many personnel it has lost, but about a third of the agency's 350 staffers have accepted voluntary buyouts, according to a person familiar with the situation. The White House last week proposed an 18pc budget cut for the non-nuclear portions of the Department of Energy, but has yet to say if it is seeking to cut spending at the EIA. Last month, the EIA released its premier report, the Annual Energy Outlook , but omitted its traditional in-depth analysis. A technical issue on 1 May delayed the release of a key natural gas storage report by more than three hours, the EIA said. By Chris Knight Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Australia's AGL to expand Kwinana power station

06/05/25

Australia's AGL to expand Kwinana power station

Sydney, 6 May (Argus) — Australian utility AGL will expand the capacity of its gas-fired Kwinana swift power station (KSPS) in Western Australia (WA) by 250 MW by 2029, according to plans submitted to WA's Environmental Protection Authority (EPA) on 2 May. AGL plans to construct a second stage of KSPS called K2. K2 will increase capacity to 370 MW from 120 MW currently, with up to four new gas-powered turbine units at the Kwinana site 40km south of Perth. Construction of the gas peaker is set to begin in 2026, and the power station will be operational from 2029. The new generators will run until 2058, according to AGL's project report. K2 will connect to the Southwest Interconnected System (SWIS) south of Perth and aims to support AGL and WA's transition to renewable energy. AGL aims to deliver 5.4 GW of renewable capacity by the end of 2030 and 12 GW by 2036, 300 MW of which has been completed through the Torrens Island battery and Broken Hill battery. Upper estimates of fuel supply are around 50 TJ/d (1.3mn m³/d), depending on operating hours, according to AGL. AGL did not disclose gas and diesel supply. AGL expects scope 1 CO2 emissions to be 5.8mn t over the project's life, while scope 3 emissions will reach 688,000t by 2058, according to the project application. Yearly emissions will decrease to meet WA's 2050 net zero target. AGL's submission came just days before Australia's Labor party was re-elected , reinforcing a focus on renewable energy. The WA government in 2023 announced further investment of A$2.8bn ($1.8bn) for its transition to renewable energy, which includes funding for large scale battery storage systems in Collie and Kwinana. WA's gas consumption is predicted to overtake supply from 2028, according to the Australian Energy Market Operator's (Aemo) 2024 outlook. New gas projects including the Scarborough energy project , the West Erregulla project , the Lockyer Gas project and the Waitsia stage two project will meet demand in 2027 but there is long-term uncertainty as the state transitions to renewable energy. Aemo introduced a WA reform program in 2023 including an energy transition strategy. This transition includes closing down state-owned coal-fired power stations by 2030, which currently account for 30pc of the grid supply in southwest WA. By Susannah Cornford Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Australia’s election gives LNG, fuels sector certainty

05/05/25

Australia’s election gives LNG, fuels sector certainty

Sydney, 5 May (Argus) — Australia's governing Labor party's second majority term could mean that changes to the offshore permitting regime promised last year are signed into law, while east coast LNG businesses will avoid a planned reservation system proposed by the opposition. Labor's victory at the 3 May election combined with the election of fewer members from the Greens party and climate-focused independents, could mean it faces less pressure to cancel fossil fuel projects. But it will remain reliant on the Greens to pass laws through the nation's upper house — the senate — meaning Labor may need to negotiate the passage of bills with the leftist party if the Liberal-National-based coalition opposes its measures. The Greens ran on a promise to ban new coal, oil and gas projects but won fewer seats than in 2022 because of preference flows. A federal decision on the lifetime extension of the Woodside Energy-operated 14.4mn t/yr North West Shelf (NWS) LNG delayed by Labor, is now looking more positive for the firm. The firm sees approval as vital to progressing its Browse gas development offshore northwestern Australia. Voters' rejection of the opposition Coalition on the nation's east coast means its policy to reserve a further 50-100PJ (1.34bn-2.68bn m³/yr) from the Gladstone-based LNG exporters will not proceed. The result provides an opportunity for certainty and stability for the energy sector, upstream lobby Australian Energy Producers said. The group urged the government to focus on new supply as Australia's gas reserves for domestic use rapidly deplete. The government will need to specify exactly how it aims to secure supplies to ensure stable supply, once coal-fired generators retire at the end of the 2020s and into the 2030s. This is because the nation's integrated system plan is based on Labor's policy of reaching 82pc renewable energy in the power grid, backed up by about 15GW of gas-fired power. Industry will await further direction stemming from the Future Gas Strategy which canvassed solutions to Australia's declining gas supply including new pipelines, storage and seasonal LNG imports. Permitting concerns In the government's previous three-year term, a series of court-ordered requirements to consult with affected Aboriginal groups briefly disrupted multi-billion dollar LNG developments. Labor promised to specify through new laws exactly which groups must be consulted before approvals could be granted. But these were dropped from the agenda in early 2024 following opposition by the Greens. Labor's resources minister Madeleine King blamed the Greens for obstructionist manoeuvres on this legislation, but it remains unclear if and when Labor might introduce such laws. Conversely, the Coalition promised to end government support for anti-gas lobbies such as law group the Environmental Defenders Office — set to continue under Labor. In liquid fuels, Labor's victory should boost Australia's electric vehicle (EV) sales, with emissions standards laws set to remain enforced. The Coalition had said it would soften the laws because of concern over cost of living pressures. Plans to temporarily cut the fuel excise will also not progress. Australia's EV take-up has stalled, and industry has blamed this on poor investment in recharging infrastructure and other policy settings, including the removal of the fringe benefits tax exemption for plug-in hybrid car models. A re-elected Labor government is likely to further policy towards a mandate for sustainable aviation fuel or renewable diesel, given the growing share of Australia's emissions projected to come from the transport industry. It pledged A$250mn ($162mn) for low-carbon liquid fuels development in March , for low-carbon liquid fuels development in March, as part of its commitment to the nascent sector. Local market participants are optimistic that further biofuels support will be provided as urgency to meet net zero ambitions builds, including a 2030 target of 43pc lower emissions based on 2005 levels. About A$6bn/yr of feedstocks like canola, tallow and used cooking oil are exported from Australia, while existing ethanol and biodiesel producers are running underutilised plants, making about 175mn litres/yr at present, because of poorly-enforced blending mandates. By Tom Major Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Australia re-elects renewable-focused Labor party

05/05/25

Australia re-elects renewable-focused Labor party

Sydney, 5 May (Argus) — Australia's Labor party has been voted in for another term in a landslide majority, reaffirming the party's targets on renewable energy and emissions reduction. The election held on 3 May saw overwhelming support for the incumbent Labor government led by prime minister Anthony Albanese, which prioritised renewable energy, compared to the opposition's plans to install nuclear plants to replace coal-fired power . Labor now face pressure to meet key energy policy targets, including 82pc renewable energy in electricity grids by 2030 and a 43pc reduction in greenhouse gas emissions on 2005 levels by 2030. The government said late last year that Australia was on track to reduce emissions by 42.6pc by 2030 , nearly within the target and rising from previous estimates of 37pc in 2023 and 32pc in 2022. This was mostly because of the reformed safeguard mechanism , the expanded Capacity Investment Scheme (CIS) and the fuel efficiency standards for new passenger and light commercial vehicles. Lobby groups now expect the government to set a strong 2035 emissions reduction target , within the range of 65-75pc below 2005 levels indicated last year by the Climate Change Authority (CCA). The CCA is yet to formally recommend a target, and the government will then need to make a decision and submit Australia's next Nationally Determined Contribution (NDC) under the Paris Agreement later this year. In metals, a plan to buy critical minerals from commercial projects and keep stockpiles to steady prices by withholding or releasing stock will now be pursued by the re-elected government. The previous Albanese government was not forthcoming in meeting calls for a biofuels mandate or production incentives but it announced it would allocate A$250mn ($162mn) of its A$1.7bn Future Made in Australia innovation fund to low-carbon fuels (LCLF) research and development in March. In agriculture, a planned ban on live sheep exports will go ahead by 1 May 2028 under laws passed last year. The coalition campaigned heavily to revoke the laws, but the re-election of Labor has raised concerns in the live export sector. By Grace Dudley Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Business intelligence reports

Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.

Learn more