Clinton’s Solar Plan Would Raise Subsidies by $62 Billion
Secretary Clinton has made a bold promise to install “half a billion” new solar panels in her first term, increase total solar power capacity to 140 Gigawatts (GW), extend renewable energy subsidies, and create new incentives for renewable energy investment. Promising to both extend subsidies and reach 140 GW of solar power has the potential to increase subsidy costs between $27.5 and $62 billion.
The subsidy in question is the Business Energy Investment Tax Credit (ITC). This tax credit allows investors in solar power to claim 30 percent of their investment costs as a tax credit. If the tax credit exceeds the payer’s liability for that year, then it is carried over to future years. The tax credit is effectively a cash rebate. This means that the tax credit of the ITC will have to be paid for either from other taxes now, or by incurring more debt to pay for it with future tax revenue.
To put this in perspective, the average annual tax credit of the ITC from 2012-2016 was $1.5 billion. Spreading out this new tax liability over four years would raise the subsidy’s cost by more than tenfold.
Considering that 140 GW of solar capacity would only provide about 7-8 percent of our total electricity needs, there should be some serious scrutiny of how well spent the money would be in achieving long term clean energy goals under an increasingly constrained budge