in homes and commercial buildings as well as utility-scale electricity generation from renewable sources, especially solar photovoltaic .
Federal ITCs and PTCs offset utilities’ renewable technology installation costs and installation costs for distributed generation technologies in commercial and residential buildings. These credits gradually phase down or end entirely, also calledIn the Sunset Credit case, sunsetting tax credits by 2023 — which is just a few years earlier than in the Reference case — reduces projected annual solar generation by 4% in 2050.
Our analysis also explores how sunsetting policies earlier or extending them later can affect long-term electricity generation and capacity from combined-heat-and-power plants , wind, hydropower, geothermal, and biomass sources, which are all also eligible for the ITC. In the commercial and industrial sectors, CHP capacity and generation grows fastest in the Extended Credit case, and natural gas is the largest fuel source of CHP generation across all cases.
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