Cutting US Energy Credits Doesn’t Save Money. It Steals It From Ratepayers & Local Governments.

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Last Updated on: 27th June 2025, 04:23 am

As negotiations on the reconciliation bill continue in Congress, many lawmakers are still looking for ways to raise additional revenue and offset the cost of extending the 2017 Tax Cuts and Jobs Act.

Clean energy tax credits, therefore, have become a target.

Despite the surge of new solar manufacturing facilities, billion-dollar investments, and new American jobs these credits have generated, some members of Congress still want to eliminate the pro-business credits in the hope that it will lower federal deficits in the long run.

This approach is misguided.

Not only would a repeal of the tax credits upend one of the greatest industrial revivals in American history, but the bill in its current form would not even achieve the budgetary saving that that its advocates are looking for.

Worse, it would shift these costs onto working families through higher electricity bills and onto state and local governments through reduced tax revenue.

The University of Louisiana at Lafayette has estimated the federal, state and local tax revenues generated by the solar industry. SEIA combined these figures with estimates of increased electricity cost due to repeal of energy credits from the Brattle group and compared these figures to the savings estimates produced by the Congressional Budget Office. These combined figures show that solar tax credits create far more value for Americans than they cost the federal budget.

National Profit

Even when setting aside the new jobs, factories, and gigawatts delivered by solar, the industry has been a major boon for America’s finances.

In 2023 alone, solar added over $75.5 billion to America’s GDP. The sector paid $12 billion in federal taxes and $3.7 billion in state and local taxes that year. From social security taxes for employees to local property taxes that fund local police stations and firefighters, solar energy adding billions to government revenues each year.

In addition to taxes, solar and energy storage have also helped keep electricity prices down for consumers across the country. A study from the Brattle Group and ConservAmerica found that eliminating the clean energy tax credits would raise electricity costs by $51 billion, with certain states seeing bill increases of over $110 per year.

All together, Americans save $2.67 for every $1 spent on solar tax credits.

State Support

A repeal of the federal clean energy tax credits would also hollow out the economic engine of many states where solar energy has surged.

Many traditionally conservative states now credit a significant portion of their GDP to solar. The solar and storage industries contributed $3.4 billion in to the Texas economy and supported $159 million in state and local tax revenue in 2023. In Utah, $1.3 billion of the state’s economy comes from solar, similar to the economic impact of Utah farms. Solar sent $50 million to Indiana’s state and local taxes and added $652.7 million to its economy, comparable to the state’s air transportation industry.

In North Carolina and Georgia, significant investments in solar have added $1.2 billion and $1.1 billion to their states respectively. Solar has added $130.9 million to Maine’s economy, $126.7 million to Iowa’s GDP, $441.5 million to Louisiana’s GDP, and $1.6 billion to Ohio’s GDP.

The economic impacts of cutting energy credits would be devastating. As SEIA has shown, over 300 factories would close or never open, $286 billion in investment halt, and 330,000 American jobs would be lost.

What’s worse, even the purported budgetary benefits of reducing the deficit would be immediately neutralized by rising energy bills and revenue shortfalls among state and local governments.

Energy tax credits are a worthwhile investment in American competitiveness, American energy security, and American communities. Each dollar spent repays itself multiple times over.

To achieve American energy dominance and usher in a new American golden age, Congress must protect these investments in American energy.

Article from SEIA.

About SEIA®: The Solar Energy Industries Association® (SEIA) is leading the transformation to a clean energy economy, creating the framework for solar to achieve 30% of U.S. electricity generation by 2030. SEIA works with its 1,000 member companies and other strategic partners to fight for policies that create jobs in every community and shape fair market rules that promote competition and the growth of reliable, low-cost solar power. Founded in 1974, SEIA is the national trade association for the solar and solar + storage industries, building a comprehensive vision for the Solar+ Decade through research, education and advocacy. Visit SEIA online at www.seia.org and follow @SEIA on Twitter, LinkedIn and Instagram.