The Energy Department's National Renewable Energy Laboratory (NREL) has released new analysis exploring 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. The tax credit extensions are estimated to drive a net peak increase of 48-53GW in installed renewable generation capacity in the early 2020s.
Longer-term impacts are less certain and can depend on natural gas prices. After the tax credits ramp down, greater renewable energy capacity is driven by a combination of assumed cost reductions in renewable generation, assumed rising fossil fuel prices, and existing clean energy policies. The tax credit extension-driven acceleration in renewable energy capacity development can reduce fossil fuel-based generation and lower electric sector CO2 emissions. Cumulative emissions reductions over a 15-year period (spanning 2016-2030) as a result of the tax credit extensions are estimated to range from 540 to 1,400 million metric tons CO2.
