The effects of federal energy tax credit on the solar thermal industry and government revenue

Hamid Habib-agahi

Energy, 1985, vol. 10, issue 5, 653-660

Abstract: This study shows the impact of the federal energy tax credit (ETC) on the solar thermal industry and on government revenue. The analysis examines investment in solar thermal technologies by limited partnerships. The potential for investment is determined by calculating the investment internal rate of return assuming a 30-year system life. Several scenarios are considered, including state tax credits at both 25 and 0% levels and coverage ratios of 1.2 and 1.4. This analysis indicates that private investment without federal incentives during the early stages of industry development is highly unlikely. Extension of the energy tax credit beyond 1985 is one means to establish a viable solar thermal electric industry before the year 2000. However, as the industry matures, the tax credit can be reduced while federal receipts will increase.

Date: 1985
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Persistent link: https://EconPapers.repec.org/RePEc:eee:energy:v:10:y:1985:i:5:p:653-660

DOI: 10.1016/0360-5442(85)90097-0

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