LONDON, UK (GlobalData), 9 October 2012 - Increasing numbers of policies to promote solar power are emerging at both federal and state level in the US, in a bid to improve energy independence and lower carbon emissions, states a new report by power experts GlobalData.

The new report* states that the US solar power market has recorded massive growth over recent years, as the energy source has established its ability to improve US national energy security and boost the economy. Solar power incentives have resulted in increased installations, boosting demand for solar backsheets in the US.

The solar PV backsheet market in North America is dominated by the US, which accounted for over 85.3% of regional additions in 2011. The US solar Photovoltaic (PV) backsheet market is supported by the recently-extended Investment Tax Credits (ITC) and Production Tax Credits (PTC) programs, which alter traditional energy market dynamics. ITC provides tax credits to commercial and residential solar PV installers, and the US government also provides accelerated 5-year tax depreciation for residential systems or businesses under the power purchase agreement, supporting the solar PV market.

Over the last few years, the US Department of Energy (DOE) ran a loan guarantee program for renewable energy projects, but this program expired in September 2011, and the current extension of the Section 1603 Treasury Grant program is only set to last until October 2012. This begs the question, what does the future hold for this maturing market with a relative absence of financial support?

During 2009-2011, the US Department of the Treasury provided 3,731 grants for solar power projects, amounting to a total of $1.56 billion, for the installation of solar power projects equivalent to 1,290.64 megawatts (MW). Following the expiry of the Treasury Grant Program in 2012, ITC will continue to support solar power development until 2016, but after this funding plans are uncertain.

However, the recent proposal of the Clean Energy Standard Act of 2012 will support the future development of the US renewable power market. Utilities will be mandated to purchase power generated from cleaner sources, with a requirement of 24% expected to be set by 2015 which will increase by 3% every year until 2035. The US government has also increased spending on PV in federal buildings and the defense sector, investing in PV equipment for military power supplies and the government sector. These support mechanisms are expected to continue to open up high growth markets for PV backsheets.

Solar power programs such as Go Solar California and Austin Utilities Solar Choice program also show states taking matters into their own hands. California, the leading solar PV market in the US, was the first state to initiate a Feed-In-Tariff (FIT) system, and rapid development has followed the ambitious subsidy policies.

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