Govt. programs return ‘almost all’ their investment? No wonder solar is fighting so hard to keep THAT going

Do this math:

  • 30% federal investment tax credit
  • 35% state investment tax credit
  • 30% federal depreciation
  • 5% state depreciation

Or, as described by the N.C. Dept. of Environment and Natural Resources in its March 2015 Energy Report,

Solar energy investors with sufficient tax liability may combine the 35 percent state ITC with the 30 percent federal ITC and the bonus accelerated depreciation schedule to return almost all of their investment within six years and may receive 57.8 percent of their investment back through tax credits and depreciation deductions within 12 months of placing into service. For an investor subject to a 35 percent federal tax rate and a 5 percent state tax rate, the [following] demonstrates how much of the solar energy investment is returned each year through tax incentives.

NCDENR solar tax incentives
Source: N.C. Dept. of Environment and Natural Resources

It’s no wonder they act as if any change in their tax credits and REPS purchase mandates would devastate them. They aren’t self-supporting at all.

pinocc

Despite decades of promises to the contrary, they have no plans to be a self-supporting, real industry.

Theirs is an industry whose business model is proudly based, not on capturing customer loyalty and winning investors banking on solar being a competitive industry in its own right, but on capturing legislators’ favors. Their long-term goal is to remain on perpetual government life support.

The solar lobby is like an anti-Pinocchio: it gets no penalty for telling whoppers, and it has no intention at all of ever being a real boy.

More strings, more!

Jon Sanders / Director of Regulatory Studies

Jon Sanders studies regulatory policy, a veritable kudzu of invasive government and unintended consequences. As director of regulatory studies at the John Locke Foundation, Jo...

Reader Comments

  • slatesplace

    I like this article, but this is only part of the scam. So investment comes back in 6 years, but what about the rumors of the selling and buying of energy. So here is how that piece works. I have a business and I setup a “solar farm”. The energy provider is required by law to purchase any unused solar energy from me. So as a smart business person all I have to do is sell all the high priced solar energy to Duke power and then turn around and run my business on cheaper grid power, and I basically get my energy for free if I work the inputs and outputs out correctly. Then the residential consumer sees their rates go up to pay for my free energy. This is the sweetheart deal of the century.