US federal solar tax credits cost the United States $25 billion per year, but deliver $51 billion in electricity bill savings, along with $12 billion in federal tax revenue and $3.7 billion in state and local taxes, according to the Solar Energy Industries Association (SEIA), the Brattle Group, and the University of Louisiana
From pv magazine USA
As US Congress negotiates the new federal budget, it is seeking to make drastic cuts to clean energy tax credits to fund extension of the 2017 Tax Cuts and Jobs Act.
However, the cost savings of cutting solar tax credits far outweighs the benefits, found analysis from the Solar Energy Industries Association (SEIA), the Brattle Group, and the University of Louisiana.
SEIA estimated solar tax credits cost about $25 billion per year. But the benefits to US ratepayers far outweighs this cost, it found. NERA Economic consulting found that cutting energy tax credits would raise average utility bills by 7% for residential customers and 10% for small businesses. Analysis from the Brattle Group found that solar tax credits lower electricity costs for US ratepayers by a combined $51 billion per year, more than double the cost of the credits.
What’s more, analysis from SEIA and the University of Louisiana found that the solar industry generates $12 billion in federal tax revenues and $3.7 billion in state and local tax revenues each year.
All told, SEIA estimated that US ratepayers in total save $2.67 per $1 in solar tax credit spending.
In 2023 alone, solar added over $75.5 billion to America’s gross domestic product, said SEIA. This includes $3.4 billion added to the Texas economy, $1.3 billion in Utah, $1.2 billion in North Carolina and $1.1 billion in Georgia, all states that have Republican representatives in Congress that are actively considering gutting the tax credits that helped launch this economic boom.
SEIA estimates that nationwide, over 300 announced factories would close or never open, $286 billion in investment halt, and 330,000 American jobs would be lost if solar tax credits are repealed.
“Energy tax credits are a worthwhile investment in American competitiveness, American energy security, and American communities. Each dollar spent repays itself multiple times over,” said SEIA.
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