These federal subsidies have provided wind and solar developers with as much as $24bn from 2008 to 2014, according to Bloomberg New Energy Finance. That's led to a 12-fold increase in installed capacity over the past decade, helping lower costs at least 10 percent each year.
Combined, wind and solar still generate less than 5 percent of electricity in the U.S. The subsidy cuts come as both industries face stiffer competition from ultracheap coal and natural gas. An NYSE Bloomberg global index of solar stocks, including those of big developers SunEdison and First Solar, has fallen about 35 percent since June. A comparable wind index is down 20 percent.
Solar developers are racing to finish projects before the end of 2016. More than 8.5 gigawatts of solar capacity will go online in 2015, followed by at least 11 gigawatts in 2016, BNEF says. Without the tax credit, which reimburses developers 30 percent of a project’s cost, BNEF expects solar installations in 2017 to drop about 70 percent.
Timely, incisive articles delivered directly to your inbox.