US Solar Tax Credits Save Ratepayers $51 Billion Annually, SEIA Reports
Key Insights
Solar tax credits cost $25 billion annually but lower electricity bills by $51 billion, according to SEIA and Brattle Group analysis.
Cutting solar tax credits could raise residential utility bills by 7% and small business bills by 10%, warns NERA Economic Consulting.
The solar industry generates $12 billion in federal and $3.7 billion in state/local tax revenues yearly, per SEIA and University of Louisiana.
SEIA estimates repealing solar tax credits would halt $286 billion in investments and cost 330,000 jobs nationwide.
As Congress debates federal budget cuts to clean energy tax credits, new analysis from the Solar Energy Industries Association (SEIA), the Brattle Group, and the University of Louisiana highlights the economic benefits of maintaining these incentives. Solar tax credits, costing approximately $25 billion annually, deliver $51 billion in annual savings to U.S. ratepayers—more than double their cost. NERA Economic Consulting warns that eliminating these credits could increase residential utility bills by 7% and small business bills by 10%.
Beyond direct consumer savings, the solar industry contributes significantly to government revenues. SEIA and the University of Louisiana found that solar generates $12 billion in federal tax revenue and $3.7 billion in state and local taxes each year. For every dollar spent on solar tax credits, ratepayers save $2.67, according to SEIA.
The economic impact extends further. In 2023, solar added $75.5 billion to the U.S. GDP, with notable contributions in Texas ($3.4 billion), Utah ($1.3 billion), North Carolina ($1.2 billion), and Georgia ($1.1 billion). These states, represented by Republican lawmakers considering cuts to the credits, have benefited from the solar boom. SEIA projects that repealing the credits would shutter over 300 factories, freeze $286 billion in investments, and eliminate 330,000 jobs.
"Energy tax credits are a worthwhile investment in American competitiveness, energy security, and communities," said SEIA. "Each dollar spent repays itself multiple times over." The findings underscore the broader economic and energy security benefits of sustaining solar incentives amid budget negotiations.