Fiscal Policies Supporting Renewable Energy in the United States: A Brief Survey
Recent renewable energy development in the United States has been motivated by a mix of federal- and state-level fiscal and regulatory policies. These policies are varied and diverse, especially among states, and are not summarized in their entirety here. Instead, the following brief summary focuses on the subset of state and federal policies that have played the largest role in the recent growth of renewable energy use and manufacturing in the United States. The emphasis of this summary is on fiscal policies, though state-level renewable portfolio standards (RPS) are also mentioned due to their importance. Policies that have played prominent roles in the past, but that are no longer primary drivers for growth, are not discussed here; a wide variety of regulatory policies (other than RPS’) are also excluded.
In summary, the primary drivers for renewable energy development in the U.S. in recent years have included, at the federal level: the production tax credit (PTC), investment tax credit (ITC), and Treasury Grant Program; and accelerated tax depreciation. At the state level, the primary drivers for renewable energy development have included state-level RPS programs as well as a variety of state-level cash incentive programs. In addition to these programs, several other federal and state programs are also summarized here, each of which is intended – in part – to support domestic manufacturing of renewable energy equipment: (1) the federal loan guarantee program; (2) the federal manufacturing tax credit; (3) state and local fiscal incentives to encourage the manufacturing of renewable energy equipment; and (4) federal and state R&D funding.