Nuclear vs. Big Solar: Government Funding of 21st Century Energy Production

June 16, 2012

The government incentivizes investment in carbon-free energy production facilities by creating tax schemes designed to make renewable energy more attractive for investors. The Energy Policy Act of 2005 created a number of tax incentives for nuclear facilities, including one tax credit based on the amount of electricity produced at the facility. The Energy Policy Act also created new incentives for solar energy production. In 2008, as part of the “bailout” of the foundering financial sector, the Energy Improvement and Extension Act of 2008 was made law. This extended the deadline on some tax incentives for solar energy facilities, but failed to increase the timelines of other solar tax incentives. Because of the 2008 law, investment in nuclear energy facilities is now more highly incentivized than the same investment in solar energy. Eliminating this disparity will encourage an even-handed approach toward innovation in carbon-free energy production.