Tax credits for solar really do create economic growth

Because of federal and state incentives, the booming solar industry in California is adding exponentially more to the economy, according to this story.

Two years into the California Solar Initiative, the taxpayers’ investment of $775 million in solar rebates has yielded $5 billion in private investment in solar projects and rapidly expanded the state’s renewable energy industry, according to the report. That’s helped create strong solar companies like solar cell maker SunPower (SPWRA) and markets for thin-film solar companies such as First Solar (FSLR). The decade-long program is on track to achieve its target of 3,000 megawatts of rooftop solar and in the first two years of the program more solar has been installed in California than in the previous 25 years.

Check out the report from the California Public Utilities Commission. According to a CPUC press release, "On average, for every $1 in incentive committed by the California Solar Initiative, an additional $6 in private funds is invested in solar technology in California."

More states need to introduce aggressive tax credits for solar, wind and other alternative energy production. And if the federal government went even higher than the 30% tax credit, we'd see huge investment by business.

As I've written before, the key to reducing our trade imbalance is curbing our energy imports. And if we curb our energy imports by creating a domestic economy based on green energy production, we will create an export boom.

Remember the huge boom to our economy from the Silicon Valley days? We can do it again, but this time the effects would truly be sustainable.