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The trouble with solar energy

March 3, 2015

Clean, renewable, sustainable: what’s not to love?

Solar power in the U.S. has grown primarily trough the use of tax subsidy programs. Yet even after decades of  these socially expensive tax credits solar power amounts to only about 1% of the energy we use today. Over the next ten years solar power is expected to grow by a factor of 10 but most of that growth will b outside of the U.S. in less developed countries not already served by an adequate power grid.

I became aware of the economic problem with solar industry a few years ago when I requested a quote on a system on behalf of a non-profit client. None of the local solar companies would even bid on the project. They knew that without the potential tax benefits, there was no way to justify the cost of the project based on the energy that would be produced. In other words, from an economic perspective, solar is an industry that exists only because of the artificial tax subsidy that we’ve created to help bolster it.

Since then, I’ve become aware of situations where the tax benefit was over-sold by solar sales representatives doubling as tax advisers. The fact is that many people do not fully benefit from the tax credit. Yet far to many gullible people have purchased solar power systems based on the sales presentation without a true understanding of the tax laws that govern energy credits.

Yesterday I read a social media post by another accountant that inspired this blog post: “Solar salesmen, in my opinion, are the new snake oil sellers of the 21st Century.” It’s bad enough that solar power is really expensive if you understand the economics. But having an industry committed to twisting the truth for its own gain puts a real blemish on solar energy.

Even as a business person with a deep commitment to environmental sustainability, I can not endorse the capital expenditures of most solar power proposals in light of so many alternative projects more worthy of funding.

From → taxes

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