How Yingli Solar’s US Business Will Benefit from Solar Tax Credits



Net metering

Net metering allows customers to earn credits for net excess generation from their solar panels. Excess electricity generated during the daytime is sent to the grid and is recorded if the house is net metered. This will be credited against the electricity consumed at night. Customers are charged only for the net amount of electricity consumed from the grid.

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According to renewable portfolio standards, it’s mandatory in some states that utilities (XLU) produce a portion of their generation from solar generators. In the absence of such generation, utilities can buy SRECs (solar renewable energy certificates) from the market or solar panel owners to meet their requirements. One SREC corresponds to one mWh (megawatt hour) of solar electricity.


ITCs (investment tax credits) are dollar-for-dollar reductions on income tax bills. These apply to both residential and commercial deployment of solar systems. Owners of a solar system are eligible for a maximum tax credit of 30% of their investment value in the applicable solar systems if their construction starts before December 31, 2019. Thereafter, the tax credit amount will gradually be reduced to 26% for construction in 2020, 22% in 2021, and 10% in 2022.

Thus, it’s important for incumbent solar (TAN) companies like Yingli Solar, Canadian Solar (CSIQ), First Solar (FSLR), SunEdison (SUNEQ), and SunPower (SPWR) to plan their project execution in order to take maximum advantage of the tax credits.

Other incentives

Apart from the above benefits, owners of solar systems also enjoy accelerated depreciation on their solar assets. This helps in the immediate reduction of the tax burden. Other benefits include property tax exemptions and sales tax exemption in certain states. Some states also offer cash rebates and STCs (state tax credits) to promote the installation of solar systems.

All of the above-mentioned regulations provide an incentive to go solar, which in turn can have a positive impact on the sales of upstream solar companies like Yingli Solar (YGE).

Next, we’ll explore how Yingli Solar has benefited from its acquisitions.


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