Solar tax credits cost $25 billion, but lower bills by $51 billion annually, said SEIA

The $25 billion annual cost of tax credits is far outweighed by the $51 billion in lower electricity bills, $12 billion in federal tax revenue, and $3.7 billion in state and local taxes, found analysis by the Solar Energy Industries Association, Brattle Group, and University of Louisiana.

June 27, 2025 Ryan Kennedy

Image: Pexels

As Congress negotiates the new federal budget, it is seeking to make drastic cuts to clean energy tax credits to fund extension of the 2017 Tax Cuts and Jobs Act.

However, the cost savings of cutting solar tax credits far outweighs the benefits, found analysis from the Solar Energy Industries Association (SEIA), the Brattle Group, and the University of Louisiana.

SEIA estimated solar tax credits cost about $25 billion per year. But the benefits to U.S. ratepayers far outweighs this cost, it found. NERA Economic consulting found that cutting energy tax credits would raise average utility bills by 7% for residential customers and 10% for small businesses. Analysis from the Brattle Group found that solar tax credits lower electricity costs for U.S. ratepayers by a combined $51 billion per year, more than double the cost of the credits.

What’s more, analysis from SEIA and the University of Louisiana found that the solar industry generates $12 billion in federal tax revenues and $3.7 billion in state and local tax revenues each year.

All told, SEIA estimated that U.S. ratepayers in total save $2.67 per $1 in solar tax credit spending.

*Image: Solar Energy Industries Association*

In 2023 alone, solar added over $75.5 billion to America’s gross domestic product, said SEIA. This includes $3.4 billion added to the Texas economy, $1.3 billion in Utah, $1.2 billion in North Carolina and $1.1 billion in Georgia, all states that have Republican representatives in Congress that are actively considering gutting the tax credits that helped launch this economic boom.

SEIA estimates that nationwide, over 300 announced factories would close or never open, $286 billion in investment halt, and 330,000 American jobs would be lost if solar tax credits are repealed.

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

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