IAEE Members and subscribers to The Energy Journal: Please log in to access the full text article or receive discounted pricing for this article.

Solar Versus Conservation Tax Credits

In the late 1970s concern about energy shortages motivated Congress to establish federal income tax credits to individuals for (1) household energy conservation expenditures and (2) purchases of renewable energy systems. Under terms of the Energy Tax Act of 1978, the tax credit for conservation expenditures is 15 percent of the amount invested, with a maximum credit of $300. The credit for renewable energy systems (such as solar space or water heaters) was initially set at 30 percent of the first $2000 and 20 percent of the next $8000. In 1980, the Windfall Profit Tax Act increased the tax credit for renewable energy systems to 40 percent of the first $10,000 in qualifying expenditures-a maximum credit of $4000.

Purchase ( $25 )

Energy Specializations: Energy Efficiency; Renewables – Solar

JEL Codes: Q38: Nonrenewable Resources and Conservation: Government Policy, Q20: Renewable Resources and Conservation: General, Q21: Renewable Resources and Conservation: Demand and Supply; Prices, Q35: Hydrocarbon Resources, Q41: Energy: Demand and Supply; Prices

Keywords: Tax credits, household energy conservation, renewable energy, solar energy

DOI: 10.5547/ISSN0195-6574-EJ-Vol6-No3-12

Published in Volume 6, Number 3 of the bi-monthly journal of the IAEE's Energy Economics Education Foundation.


© 2023 International Association for Energy Economics | Privacy Policy | Return Policy