By Tom Kleckner

The budget bill signed by President Obama on Friday — which appears to mark the beginning of the end for renewable energy subsidies — will accelerate the growth of solar power in the next several years, analysts say.

The bill extends the solar investment tax credit indefinitely, albeit at a reduced level after 2019.

The wind production tax credits were extended through 2019, also at reduced levels after 2016.

The Solar Energy Industries Association predicted U.S. solar power capacity will triple to 95 GW by 2022 as a result of the incentives — enough to supply 3.5% of the nation’s electricity, up from less than 1% in 2014. SEIA CEO Rhone Resch predicted solar jobs will grow from 200,000 to 340,000.

Greentech Media’s GTM Research is even more bullish, saying it expects solar capacity to quadruple to nearly 100 GW by 2021. The ITC extension will lead to $40 billion in incremental investment in solar between 2016-2020, it said.

“There’s no way to overstate this — the extension of the solar ITC is the most important policy development for U.S. solar in almost a decade,” said MJ Shiao, director of solar research for GTM Research.

By 2020, said Shayle Kann, senior vice president at GTM Research, “more solar will be installed each year than was added to the grid cumulatively through 2014.”

Wall Street agreed, with solar companies Enphase Energy, SunEdison and SolarCity each rising by 32% or more last week.

“With the extension of tax credits, solar becomes cost-effective for new customer demographics and in more states. Without it, it could take years for that to be true,” Shiao told RTO Insider. “With the ITC extension, the next five years will see 25 GW of solar that otherwise wouldn’t be installed.”

The bill extends the 30% solar investment tax credit through 2019, dropping gradually to 22% by 2021. The credit is eliminated for homeowners beginning in 2022 but continues indefinitely at 10% for commercial installations. Projects that come online by the end of 2023 will qualify for larger credits based on the year in which construction began.

Shiao said the extension provides a bridge to EPA’s Clean Power Plan, whose requirements don’t take effect until 2022. The CPP anticipates additional wind and solar energy making up for reduction in fossil fuel generation.

GTM Research said the extension will have the biggest impact on utility-scale solar, boosting deployments 73% through 2020 with utility-scale contracts dropping below $0.04/kWh.

Without the bill, the ITC would have dropped to 10% for non-residential and third-party-owned residential systems and zero for host-owned residential systems in 2017.

Bloomberg New Energy Finance said developers would have installed 11.9 GW of solar panels in the U.S. next year in a rush to beat the end of the ITC. With the extension, BNEF said, 2016 will likely see the addition of about 9.1 GW, a drop of almost one-quarter.

BNEF had predicted solar installations would drop by as much as 71% in 2017. It now predicts an increase of 5.5% over 2016.

IHS Technology said the U.S. solar installations would have dropped by 6.5 GW in 2017 from 2016 without the extension.

End Game for Wind?

The story is a bit different for the more mature and competitive wind industry.

The wind production tax credits were extended at 2.3 cents/kWh for 2015 and 2016, dropping by 20% in each of the following three years to 40% of the current level by 2019. Without additional congressional action, it would expire in January 2020.

The American Wind Energy Association said in a statement Friday that the bill ensures “stability for 73,000 American wind industry workers … and [wind] investors.”

AWEA said the PTC has helped more than quadruple U.S. wind power, with installed capacity rising from 16.7 GW at the beginning of 2008 to 69.5 GW by the third quarter of 2015. The organization credits the PTC with helping advance wind turbine technology, leading to a 66% drop in the cost of wind energy over the last six years.

Beth Soholt, executive director of the renewable energy advocacy group Wind on the Wires, issued a statement  applauding Congress’ action.

“This extension gives these renewable energy industries the certainty they need to plan for the future and mitigates the boom-bust cycles that are so very detrimental,” Soholt said.

When renewable energy tax credits were allowed to briefly expire in 2013, wind farms saw a 92% drop in their installation and some 30,000 jobs were lost. After the PTC was renewed, the wind industry recovered all but 7,000 jobs by the end of 2014, according to AWEA data.

With the extension, according to BNEF, the U.S. will add 44 GW of wind capacity by the end of 2021, a 76% increase over the 25 GW it said would have been built without any subsidies.

Wall Street’s reaction to the PTC was more muted, with Vestas Wind Systems A/S, the world’s largest turbine maker, finishing last week up by more than 8%, albeit at a five-year high.