Politicians are currently deciding the fate of various federal programs, including a solar tax credit that has been a catalyst to the industry so far. The latest news are that one party might be ready to compromise on the 40-year-old oil export ban if the other can agree to a package of incentives for renewable energy. As usual with these things, it's always hard to be sure what will happen until the final deal is inked, but we can have a pretty good idea what will happen if the solar tax credits are not renewed or replaced (remember, these only partly balance out all the direct and indirect subsidies for fossil fuels that have been handed out for decades -- it would probably be even more effective to remove fossil fuel subsidies than to give tax credits for renewables)...
Lyndon Rive, who's the CEO of SolarCity, the largest U.S. solar installer, had this to say in an interview with the Mercury News:
Q: How important is the federal 30 percent tax credit for solar panel installation?
A: On the federal tax credit, it's super important. SolarCity has the lowest cost structure in the country, but we did a lot of work to get there. We will be able to grow in 2017 with a 10 percent tax credit. Not just maintain, but actually grow. But the gap between us and the next company is huge.
If the math doesn't work, you're not going to have any customers, or very few. If you look at the industry -- 170,000 jobs -- I would not be surprised if 100,000 jobs disappear. It's going to be a total devastation for the industry. There will be a few left standing that can make it work. But it's going to be a real pain.
Of course, Rive isn't exactly impartial in all this, but even if he's exaggerating somewhat, that's still a lot of jobs, and a lot of solar panels that won't get installed by those people not working (and not paying taxes, which helps pay for the tax credits). Not only would this slow down the power grid's transition to a more sustainable and cleaner energy mix, but it would also create instability in the industry, which those who make big, long-term investments in clean energy don't like.
In a better world, the solar tax credit would be increased and paid for by a carbon tax, or a 1-2 cent tax on gasoline or something like that. The oil, gas, and coal industries have received billions and billions over decades. We're very far from a level playing field. And clean energy will actually make the world better for everyone by reducing pollution, climate change, and geopolitical instability. Seems like something worth encouraging!