Citizens Group Says Pull The Switch On ‘Solar Socialism

Citizens Against Government Waste says it’s time to end solar subsidies that fail to bolster the U.S. energy portfolio despite leeching tens of billions of dollars from taxpayers.

Tax expenditures through subsidies for alternative electricity generation cost nearly $14 billion from 2004 to 2015, but failed to build the solar energy industry, according to a CAGW report released Tuesday titled “The Sun Should Set on Solar Socialism.”

“As the debate over extending more tax breaks to solar energy rages on in Congress, CAGW’s report clearly demonstrates why the federal government should not be anointing certain niche industries over others,” CAGW president Tom Schatz tells The Daily Caller News Foundation. “Solar energy should be able to pass muster in the marketplace without the financial crutch of tax credits and other subsidies.”

Solyndra – the most infamous example of taxpayers losing from solar subsidies – went bankrupt in 2011 after receiving $535 million from Department of Energy loans.
Solar subsidies “has yet to deliver on promises that it will help to foster a sustainable, reliable, credible component of the U.S. energy portfolio,” the report says. “If the solar industry could stand on its own without generous taxpayer subsidies, and arguably could have done so all along, then there was no reason to drag taxpayers into the game in the first place.”

In fact, the energy capacity supported by solar energy tax credits is “unknown” because the Internal Revenue Service isn’t required to collect the relevant data, according to CAGW.

The report cites a Massachusetts Institute of Technology study that found solar energy only accounts for about 1 percent of the U.S.’s electricity generation and that there is “no evidence” solar technologies will suffer without subsidies.

The report also argues high-income taxpayers disproportionately benefit from the subsidies, such as through credits awarded to affluent homeowners who sell surplus energy generated from solar panels back to the power grid.
“The efforts to subsidize solar have not just failed to lower its cost, they have also led to waste, fraud, abuse and mismanagement,” the report says. “Perhaps these results were inevitable when the government created a new, lucrative program and provided little accountability.”

For example, a 2012 GAO report found 65 overlapping federally-funded solar energy initiatives. Also, “solar and wind ventures could be illegally double-dipping subsidies,” the Treasury Inspector General for Tax Administration reported in April 2011, CAGW says.

Renewable energy tax credits may “be an obstacle to the industry’s own progress,” the report says. “As watchdog groups have noted for many years, when government decrees winners and losers in the energy industry or just about any other economic sector, taxpayers all too often end up carrying the losers.”