According to reports issued by the International Energy Agency (IEA), solar power could become the world’s largest source of electricity within the next 35 years. Two IEA “technology roadmaps” project that by 2050, photovoltaic (PV) systems could account for up to 16% of global electricity generation, and concentrating solar power plants could account for an additional 11%. These levels of solar power production could prevent the release of more than 6 billion tons of carbon dioxide annually (which is more than current US annual energy-related CO2 emissions). The IEA reports emphasize that reaching these benchmarks depends upon the emergence of a consistent energy policy. According to Maria van der Hoeven, Executive Director of the IEA, in the absence of clear, consistent signals from policy makers, investors lack certainty, transactions become more expensive, and some project simply do not more forward.
The impact of this uncertainty is apparent in the US solar market today. According to PV Insider, the expiration of the 30% investment tax credit for solar projects in December 2016 has already created difficulties for financing utility-scale PV projects in California. Completing a PV project of 150 MW or more can take up to two years. As a result, the size of PV projects that are currently able to obtain PPAs and tax credit equity are smaller.