In a blog promoted by conservative media, The Heritage Foundation's Lachlan Markay criticized a report finding that a federal solar tax credit can more than pay for itself. Heritage claimed the study "assumes that solar companies that enjoy the tax breaks in question will survive." Pointing to failed solar-panel makers like Solyndra, Heritage said "a number of the recipients of the solar tax credit may not be around to produce the returns projected " in the study. But in fact, the report analyzed a tax credit for consumers of solar panels, not tax credits for manufacturers.
The report, conducted by the U.S. Partnership on Renewable Energy Finance (a coalition of financiers who support renewable energy) found that the Investment Tax Credit for solar photovoltaic installations can deliver a return on investment over a 30-year period under an increasingly popular investment arrangement in which developers lease solar power systems to businesses and homeowners, who then make taxable payments over several years for the system or pay for the electricity generated. These and other taxes directly related to the installation and operation of the solar systems would more than offset the initial cost to the federal government over the study period, according to the analysis.
The report shows that renewable energy can be a fiscally sound investment for the government -- contrary to claims made by some in the conservative media who attack any and all efforts to encourage renewable energy use. Tax credits for renewable energy have been supported by Republicans in the past. The tax credit in question was initially signed into law by George W. Bush.
In his post, Markay also mistakes a tax credit from the Indiana Economic Development Corp., an investment supported by Indiana Republican Governor Mitch Daniels, for the federal tax credit. The Washington Free Beacon completely misunderstood the report, running the false headline "Solar Might Pay For Those Loans - In 2042," which Fox Nation also used. Again, we're talking about a tax credit here, not loans or loan guarantees.
In a conversation with Media Matters, the primary author of the report described the assumptions of the report as "conservative," as it only considered tax revenues directly associated with solar installations, and didn't factor in the employment or environmental benefits of the projects. Conservative media clearly feel obliged to attack a report that they don't understand as it undercuts their primary argument against clean energy incentives -- that we "can't afford" them.