Net metering and solar mandates to drive the solar PV market in the Americas
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Net metering and solar mandates to drive the solar PV market in the Americas

By GlobalData Energy 22 Oct 2021 (Last Updated October 21st, 2021 14:53)

GlobalData’s latest report provides a clear overview of the renewable energy policies of nine key American countries.

Net metering and solar mandates to drive the solar PV market in the Americas
Solar PV is set to account for 51% of cumulative installed renewable capacity in the nine countries by 2030. Credit: fuyu liu / Shutterstock.

GlobalData’s latest report, ‘North and South America Renewable Energy Policy Handbook 2021’, offers comprehensive information about the renewable energy policies of the American countries. The report provides a clear overview of the regulatory framework, plans, programmes and incentives initiated by the individual countries to promote renewable energy sources. It provides information regarding the financial incentives, renewable energy auctions, net-metering, renewable targets and other plans implemented by the government or utilities of nine key American countries – the US, Canada, Mexico, Brazil, Argentina, Chile, Colombia, Peru and Venezuela. The report also covers each of the 50 states in the US and 11 provinces and territories in Canada.

In 2020, Solar photovoltaics (PV) had a share of 34% in the renewable capacity mix among the nine North and South American countries covered in the report. The segment is set to account for 51% of the cumulative installed renewable capacity by 2030. This is largely due to net metering policies in the region, especially in the North American countries. The introduction of California’s solar mandate that came into effect on 1 January 2020, which requires all single-family homes and multi-family homes that are up to three stories high to have a solar PV installation, and the extension of Investment Tax Credit (ITC) in the US are set to drive the segment.

Canada and the US have offshore growth strategies at a federal level, as well as at a state/territorial level. Combined offshore wind capacity in the nine countries covered in the report is set to grow at a CAGR of 93.4% during the period 2021-2030 with most of the capacity additions coming from the US. This expected growth is driven by favourable policies including the US Government’s target of adding 30GW of offshore wind capacity by 2030. The US Government has also set provisions to provide 30% tax credit for offshore wind facilities whose construction begin before 2026. At the state level, several states, such as Maryland, Massachusetts and New Jersey, have set offshore wind carve-outs in their Renewable Portfolio Standard (RPS) targets. Auctions will continue to drive this segment in the US and the entire region.

In the Americas, only the US, Canada and Argentina have a functioning RPS system, however, it has helped set achievable national renewable energy targets, whilst focusing on grid infrastructure improvements, which has provided priority access to renewable power plants. In Canada and the US, RPS are set at a state or territorial level. States such as California, Colorado and Hawaii have set RPS targets to achieve 100% renewable electricity generation by 2045-2050.

In January 2021, California became the first state in the US to introduce a Microgrid Incentive Program, which aims to provide a microgrid tariff scheme. The $200m programme is aimed at funding clean energy microgrids to support the critical needs of vulnerable communities impacted by grid outages and to test new technologies or regulatory approaches to inform future action. In May 2021, Hawaii became the second US state after California to introduce a microgrid tariff. This is a unique trend that is expected to promote microgrids in the long term.

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