by Jon Sanders
Director of the Center for Food, Power, and Life, Research Editor | John Locke Foundation
The state’s most hyperactive lobby has cranked its rent-seeking antics up to 11 to retain special investment tax credits and the state’s renewable energy portfolio standards (REPS) purchase mandates.
The tax credits, which these special-interest lobbyists has made plain as day that their industry absolutely requires them — now, next year, and forever — to survive, are a key cog in the industry’s business model.
That’s why the special-interest lobbyists’ claims of being “free-market” are just complete and utter — well, let’s put it this way. If those claims could be burned, they would more than satisfy the pig waste portion of their precious REPS mandate.
The tax credits are so important because they get the solar investors to a very important number: 100. As in 100 percent guaranteed return on all investment. It’s “no risk” to them as the state forces everyone who isn’t a green crony to cover it (i.e., those politically unimportant regular people). As described by the N.C. Dept. of Environment and Natural Resources in its March 2015 Energy Report,
Solar energy investors with sufficient tax liability may combine the 35 percent state ITC with the 30 percent federal ITC and the bonus accelerated depreciation schedule to return almost all of their investment within six years and may receive 57.8 percent of their investment back through tax credits and depreciation deductions within 12 months of placing into service. For an investor subject to a 35 percent federal tax rate and a 5 percent state tax rate, the [following] demonstrates how much of the solar energy investment is returned each year through tax incentives.
But but but It’s an infant industry! It’s still crawling but it’s almost ready to walk on its own! Right?
Six years ago, the Institute for Energy Research asked “Will renewables become cost-competitive anytime soon?” and still the answer from its lobbyists (six years later and looking several years in the future) is an emphatic NO.
IER compiled several quotations to put the “infant industry on the verge of competing” bit in historical context. I thought about quoting them all, then I realized this one fairly well had it covered:
In 1986, Amory Lovins of the Rocky Mountain Institute lamented the untimely scale-back of tax breaks for renewable energy, since the competitive viability of wind and solar technologies was “one to three years away.”
That was almost thirty years ago.