Policy and Solar: A Pivotal Relationship

The future of solar energy in the United States isn’t solely dependent on technological innovation. While advancements in photocell capacities will certainly play a significant part in solar reaching its tremendous potential, many other factors play critical roles in the future adoption levels of solar energy technologies.

Although not as often discussed as the innovations that propel the industry, policymakers at the state and federal levels of government play an equally important role in determining the future popularity of solar systems.

Tax Incentives

Tax reform and overhaul were primary talking points throughout last year’s presidential campaigns. While legislation has yet to introduce which particular aspects of our tax code due for overhaul, it’s safe to assume that itemized deductions and various tax incentives will play a pivotal role in the process.

Of course, tax incentives have become synonymous with solar energy systems at both the individual consumer and business levels. Redefining any such incentives could very well have a significant impact on the overall adoption rates of new solar systems. As important as climate issues are to the majority of Americans, affordability will always be a critical concern in the overall viability of solar energy.

To put it more concisely, tax breaks make solar technologies more affordable. Losing tax incentives will have an obvious effect on the popularity of solar systems going forward. Although the current solar tax incentive is not due to sunset until 2022, the forward-looking nature of the marketplace will have an immediate impact if similar incentives are not carried further into the future.

Subsidies

Over the last two decades, renewable energies have relied on substantial government subsidies to fund technological innovation. However, given the current political landscape, it is incumbent on the solar industry to prove it can provide a cost-effective solution that serves as an economically viable alternative to our standard electricity providers.

This very notion represents a conundrum of sorts since lower costs are dependent on technological advancements that, paradoxically, are themselves dependent on further funding. In other words, the solar industry is largely dependent on government subsidies to drive innovations that will continue to make it more affordable for the average consumer. However, those government subsidies will likely be dependent on the industry’s ability to bring costs down. A cut in such subsidies will have a sudden and lasting impact on the research solar relies on to continually evolve.

The Bottom Line

Although domestic policy will always have a substantial impact on adoption rates due to tax incentives and federal subsidies, there’s no doubt that solar energy technology is already deeply rooted. While affordability measures might vary according to the leanings from Washington, individuals, families and companies alike will continue to seek eco-friendly solutions for their energy needs. Golden Solar will likewise continue to offer those very solutions for our neighbors throughout Colorado.

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