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Business Tax Credits for Wind and Solar Power

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  • Congressional Budget Office

Abstract

Investment in wind and solar electric power is directly supported by two tax credits, the investment tax credit (ITC) and the production tax credit (PTC), which were modified and extended by the 2022 reconciliation act. In CBO’s January 2025 baseline budget projections, the ITC and PTC together increase projected deficits by $308 billion from 2026 to 2035. The tax credits provide an incentive for private-sector investment; CBO estimates that without them, investment in wind and solar electric power from 2024 to 2026 would be about one-third less than is expected with the credits in

Suggested Citation

  • Congressional Budget Office, 2025. "Business Tax Credits for Wind and Solar Power," Reports 61188, Congressional Budget Office.
    • Handle: RePEc:cbo:report:61188
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    File URL: https://www.cbo.gov/system/files/2025-04/61188-solar-wind-incentives.pdf
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    More about this item

    JEL classification:

    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

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