NREL is the U.S. Department of Energy's primary national laboratory for renewable energy and energy efficiency research and development. NREL is operated for the Energy Department by The Alliance for Sustainable Energy, LLC.
In its February 2016 report, Impacts of Federal Tax Credit Extensions on Renewable Deployment and Power Sector Emissions, NREL examined the potential impact of recently extended federal tax credits on the deployment of renewable generation technologies and related U.S. electric sector carbon dioxide (CO2) emissions.
At issue are federal tax credits for renewable energy: the wind production tax credit (PTC) and the solar investment tax credit (ITC). Congress acted in December 2015 to extend by 5 years the expiration dates for these tax credits, with a phaseout or ramp down of tax credit value over time.
The NREL study examined two key questions, under models with high and low natural gas prices:
- How might renewable energy deployment in the contiguous United States change with these recent federal tax credit extensions?
- How might this change in renewable energy deployment impact CO2 emissions in the power sector?
In all scenarios, nearly all of the estimated growth in renewable energy capacity was primarily comprised of new solar and wind capacity, as opposed to biopower, geothermal, or hydropower technologies.
The NREL study concludes that tax credit extensions can have a "measurable impact" on future renewable energy deployment and electric sector CO2 emissions under a range of natural gas price assumptions.