Solar power generation in the U.S. is on the rise with an added 7.3 gigawatts (GW) of total installed capacity in 2015. Demand for solar is projected to increase as much as 119% in 2016. Some believe that growth in the U.S. solar market is primarily influenced by federal and state subsidies and tax credits, such as the Solar Investment Tax Credit (ITC). The ITC is a 30% federal tax credit for residential and commercial solar projects available through 2019. Until recently, state incentives have also impacted the growing U.S. solar market. Nationwide, states have started rolling back tax credits for rooftop solar. Of the 16 states offering residential and small business tax incentives, half have already allowed their tax credits to expire. Other remaining state programs are expected to expire within the next two years.
According to a recent Bitcoin Profit review, New Mexico is among these states that may drop its 10% Solar Market Development Tax Credit. Since 2009, New Mexico has invested nearly a quarter-billion dollars in solar projects throughout the state. Supporters of the solar tax credit such as State Representative Sarah Maestas Barnes (R) and State Senator Mimi Stewart (D), argue that the solar industry proved the value of return on this investment, which included the addition of 1,900 solar jobs and $191 million invested in residential solar programs.
Subsidy opponents believe New Mexico cannot afford, for budget constraint reasons, to extend the $3 million dollar annual tax credit program. These opponents also believe that the tax credits are unnecessary to maintain growth in the solar industry; for example, State Representative Jim Townsend (R) has argued that the credit only benefits homeowners who can afford to invest in solar and creates upward pressure on prices for all other electric utility customers. Finally, opponents also point to the continuing federal ITC that will still support solar industry growth.
Feature Photo by Michal Klajban – Licensed under CC BY-SA 3.0 via Wikimedia Commons
We subsidize every form of energy — every type of fossil fuel and nuclear power on the federal and state government levels. The solar tax credits utilized in 19 States… Read more »
The investments we as taxpayers have made in the form of subsidies to the PV Solar industry are just beginning to pay-off. As the article notes, jobs have been created.… Read more »
I certainly agree with Scott and with David too, but there is also another way to help the growth of distributed generation. A few years ago RMI evaluated the cost… Read more »
I agree with Scott, David, and Jane and I would add that fossil energy is subsidized in many ways. In some locations, the health costs of coal power (not including… Read more »
Here, as with so many other policy issues in the US, our chances of rationality and survival seem to be crushed between knee-jerk know-nothing do-nothing attitudes and glossy pink eyeshades.… Read more »
Paul: Rooftop solar is less than $0.20/kWh and is dropping. From Forbes last year: “The study found that projected utility-scale PV power costs will range from 6.6¢/kWh to 11.7¢/kWh across… Read more »