Matthew Kandrach – President, CASE
November 15, 2019
Every parent knows that helping children transition to adulthood comes with the territory. Most parents are willing to support their children until they can stand on their own two feet, but when offspring are pushing 30, living at home, and relying on the parental unit, there’s a problem.
Most parents get fed up when their children, all grown up and perfectly capable of flying the coop, refuse to live independently.
America’s taxpayers should be similarly fed up with the Solar Investment Tax Credit, known as the ITC.
Created when solar was a nascent industry to help spur Americans to invest in energy solutions for their home or business, the ITC provides thousands of dollars in credits for those who decide to equip their homes with solar.
It was passed in 2005 and has since been reauthorized a few times, with the expectation it would cease altogether in 2015. Once 2015 came around, however, Republicans and Democrats cut a deal that gave the program four more years. All sides agreed to let it die in 2019.
But that was then, and this is now.
Congress is back to debating whether to pass another extender on this issue. Not only have we propped up solar from infancy to adulthood, but some in Congress believe we should offer this tax break in perpetuity.
But solar is not a child anymore. Solar energy is now a profitable industry. Thousands of employees and billions of dollars in profit have allowed solar to experience explosive growth since annual installations grew from just 849 MW in 2010, to more than 15,000 MW in 2016. In that record-breaking year, the U.S. solar market nearly doubled its annual record for installations.
And yes, tax incentives are factored into the growth, but efficiency and affordability have driven it.
Another factor to consider is that solar-panel costs for an average-sized installation in the U.S. usually range from $10,836 to $14,196 after solar tax credits. What kind of person is inclined to choose to spend tens of thousands of dollars on home investments? The affluent. This is a tax break for the wealthy.
The solar industry is constantly going on about homeowner savings on energy costs. Those savings, in addition to platitudes of “saving the planet by going green” should be incentive enough for consumers in the solar energy market. While Congress seeks to pad the bank accounts of largely upper-class homeowners, federal resources are siphoned from more urgent priorities, and our trillions in debt grow ever larger.
Part of the goal of Republican-backed tax reform was to end carve-outs, make the tax code less complicated and streamline the IRS. It’s hard to dispute this extender represents anything other than corporate welfare at its most wasteful. Congress may please a few green special interest groups and solar corporations, but otherwise, not many people overall would miss the credit because they could never afford to receive it anyway.
We would be wise to finally kill an extender that benefits very few Americans and simply gives affluent individuals just another gift for doing something that the green energy industry says will already save them in the long run.
It is time for the solar energy industry to grow up and take the dive out of the nest. The numbers indicate the industry will do just fine without government holding its hand forever.
