Having secured a good 40% of the US$2.3 billion in clean-energy manufacturing tax credits in the American Recovery and Reinvestment Act (ARRA), the solar industry must feel very pleased with itself right now. However, Gartner research analyst, Alfonso Velosa fears that too much of a good thing for solar could backfire and create hostility from U.S. politicians in supporting the industry in other important initiatives, which continue to require government support.
In a weekly newsletter to clients, Velosa noted that, “The U.S. government’s tax credit plan is a good investment in the solar industry. However, we need to keep in mind that government policies have good and bad effects, and in particular, these policies are subject to the law of unintended consequences.”
Velosa believes that the national renewable energy standards policy for utilities to adopt renewable power could be affected with new restrictions by U.S. politicians.
The market analyst noted that as job creation will take several years to unfold, the industry will need to make greater effort to highlight clearly the timeline for the new jobs being supported by the tax credits.
Failure to do so could help fuel the arguments for cuts in support for more important solar programs.