ATR Urges Lawmakers to Oppose the Solar ITC and Wind PTC

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Posted by Justin Sykes on Thursday, December 3rd, 2015, 11:14 AM PERMALINK

As lawmakers meet this week during negotiations over the tax extenders deal, Americans for Tax Reform (ATR) encourages them to oppose any efforts to extend the Investment Tax Credit (ITC) for solar past 2016 and also urges opposition to reviving the Production Tax Credit (PTC) for wind. American taxpayers have already been forced to pay billions in handouts to the wind and solar industries and the time has come to end such anti-free market practices.

The ITC for solar energy was originally introduced in 2006, and provides a 30 percent credit for commercial and residential solar. Similarly, the wind PTC  provides wind producers with a 2.3-cent tax credit for every kilowatt-hour of electricity produced over ten years. Currently the PTC is expired, and in 2016 the residential credit under the ITC will expire with the commercial credit dropping to 10 percent.

Lawmakers should oppose any efforts to extend the ITC or to revive the PTC that may come during tax extender negotiations. Both of these credits are massive burdens that have benefited a small number of those in the wind and solar industry at the expense of billions in taxpayer dollars. According to a recent report by Citizens Against Government Waste (CAGW), from 2004-2015 tax expenditures for the ITC and PTC have cost $11.5 billion. Since 2008 alone the PTC has cost taxpayers over $7 billion. 

Ironically, a number of those in the renewable energy sector agree that propping up renewable energy is not a burden that taxpayers should be expected to bear. For instance John Berger, CEO of the third-largest residential solar company called Sunnova, supports “letting the ITC expire, and believes the industry can stand on its own two feet…without being overregulated and subsidized using unnecessary taxpayer dollars taken from hardworking Americans.”

Similarly, Enphase Energy CEO Paul Nahi told Forbes in a 2013 interview that “where there is no projected end to funding, subsidies stop being a catalyst, and start becoming a crutch.” Nahi went on to conclude that “a robust, renewable energy market will remain hampered if the energy industry continues to chase the next subsidy.” 

The fact is both Berger and Nahi are all to correct. Special treatment from the government does not advance solar and wind related technologies but instead stymies progress as the industries become more and more complacent in their dependency on taxpayer handouts. The government should not be picking winners and losers in the marketplace. Such anti-free market policies result in taxpayers being on the hook for the government’s gambles, as is the case with the ITC and PTC that have cost taxpayers billions.

When the free-market is compromised by government sweetheart deals that favor one industry over another at the expense of taxpayers, the competitive edge and drive that has made America great is lost. This year lawmakers on Capitol Hill should not perpetuate this economically disastrous cycle. Congress should instead represent the best interests of their taxpayer constituents, and choose to oppose efforts to extend the ITC and efforts to revive the PTC.

Photo credit: Elliott P. 

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