Title of Dissertation: national renewable energy policy

Figure 29. 
Federal expenditures for energy development by source, 1950-2010. 
 
Source: 60 Years of Energy Incentives: Analysis of Federal Expenditures for Energy 
Development, Management Information Services, Inc., October 2011. 
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Solar Energy Research, Development, and Demonstration Act of 1974, Public Law 
93-473. 88 Stat.1431. 1974. 
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Oil
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R&D
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Disbursements
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In 1978, four acts that include solar policies were enacted. The Energy Tax Act 
included an income tax credit to the residents who use solar, wind, and geothermal 
sources of energy. The credit was a 30 percent of the expenditure up to $2,000 and a 20 
percent of the expenditure between $2,000 and $10,000. The Act also included a 10 
percent business tax credit for investments in energy properties including solar and wind 
energy. Another two Acts authorized financial assistance programs for solar energy. The 
National Energy Conservation Policy Act empowered the Secretary of Energy to direct 
the Federal National Mortgage Association to make commitments to purchase loans and 
advances of credit relevant to installing solar energy systems. The Small Business Energy 
Loan Act empowered the administration to create a solar energy loan program to small 
business. In the same year, the Solar Photovoltaic Energy Research, Development, 
Photovoltaic and Demonstration Act
was enacted to provide more support for research, 
development, and demonstration for solar energy. The act included quantified objectives: 
1) to double the production of solar PV system each year; 2) to reduce the average cost of 
installed solar PV energy systems to $1 per peak watt by 1988; and 3) to stimulate the 
purchase by private buyers of all the solar PV systems in 1988.
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In 1980, under the Energy Security Act, the Solar Energy and Energy 
Conservation Bank Act was enacted. The act was to create Solar Energy and Energy 
Conservation Bank, which provided financial assistance to the expenditures for 
residential and commercial energy conserving improvements and solar energy systems. 
The purpose of the policy was to encourage the use of solar energy, and to “reduce the 
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Solar Photovoltaic Energy Research, Development, Photovoltaic and Demonstration 
Act of 1978, Public Law 95-590. 92 Stat. 2513. 1978. 

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Nation’s dependence on foreign sources of energy supplies.”
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Energy security was still 
a critical driver of promoting solar energy in the 1980s. 
The Tax Reform Act of 1986 extended the energy investment credit for solar 
energy property. In the act, the credit for solar energy was set as 15, 12, and 10 percent in 
1986, 1987, and 1988, respectively. The credit has expanded by another acts for the next 
few years. The Omnibus Budget Reconciliation Act 1989 extended the credit through 
1990. In 1992, the Tax Extension Act extended the credit through 1992 again.
In 1989, the Renewable Energy and Energy Efficiency Technology 
Competitiveness Act was enacted to authorize “aggressive” national programs of 
research, development, and demonstration of renewable energy and energy efficiency 
technologies. The act included national goals for the national programs. The specific 
goals for PV energy systems include: 1) to improve operational reliability of photovoltaic 
modules to 30 years by 1995; 2) to increase photovoltaic conversion efficiencies by 20 
percent by 1995; 3) to decrease new photovoltaic module direct manufacturing costs to 
$800 per kilowatt by 1995; and 4) to increase cost efficiency of photovoltaic power 
production to 10 cents per kilowatt hour by 1995. Compared to the goals in the Solar 
Photovoltaic Energy Research, Development, Photovoltaic and Demonstration Act, these 
goals were much more specific. 
The Energy Policy Act of 2005 created one of the most important policies for 
solar energy, which was a 30 percent of business investment tax credit for the 
investments in solar energy properties. The period was from January 2006 through 
December 2007. This credit was extended for an additional year through 2008 by the Tax 
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Energy Security Act of 1980, Public Law 96-294, 94 STAT. 611. 1980. 

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Relief and Health Care Act 2006. In 2008, the Emergency Economic Stabilization Act 
included an eight-year extension of the credit through December 31, 2016.
This investment tax credit (ITC) was pointed out as one of the most important 
policies for solar PV industry development in the U.S. by a majority of the actors in the 
solar PV field. The ITC has helped solar technology to compete with other energy 
sources. A research manager at the Smart Electric Power Alliance (SEPA) said, “ITC is 
kind of [the] one and only incentive [that makes investment banks] all interested in 
investing in solar industries instead of others.”
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The eight-year extension of the ITC was 
especially beneficial to solar industry. The director of the GW Solar Institute pointed out: 
“The eight-year certainty of policy encouraged industry to make longer-term investment 
in terms of business plan, R&D, or large scale projects like utility-scale [projects].”
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Other than the experts, most of the representatives of the solar PV corporations 
interviewed also mentioned that the ITC was one of the most important solar policies for 
them. 
The solar ITC was more helpful since the timing of implementation was 
appropriate. A program manager at Solar Foundation explained, “The investment tax 
credit came at a period that was really quite well timed because from the mid-2000s, the 
German solar industry have been ramping up and increasing production and those 
companies are selling it to the solar industry or able to reach the economies of scale”.
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The solar ITC became a more effective policy since the costs of solar was coming down 
as a result of the investments in solar PV industry in Germany and Europe. 
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The Energy Policy Act of 2005 has introduced another important policy for solar 
energy, the loan guarantee program. The act authorized the Department of Energy to 
guarantee loans for the projects that “avoid, reduce, or sequester air pollutants or 
anthropogenic emissions of greenhouse gases” or “employ new or significantly improved 
technologies.”
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The program was to encourage commercial use of new energy 
technologies in early stages. According to the SEIA, as of August 2016, eleven utility-
scale solar power plants have received loan guarantees, whose total capacity is expected 
to be 2,700MW. 
In 2009, the American Recovery and Reinvestment Act (ARRA) extended much 
support for renewable energy and energy efficiency technologies. It included $16.8 
billion in funding for energy efficiency and renewable energy. As for solar energy, the act 
included a cash grant in lieu of the ITC for solar properties. It also included $6 billion in 
loan guarantees for renewable energy and electric power transmission programs. Since 
this act provides broad funding for energy technologies, it has contributed to developing 
the technologies that were helpful for expanding solar energy: “Most of the energy 
storage that are large and interesting and supported by utilities today were funded through 
ARRA and now that the utilities had gotten a taste for energy storage that serving to be 
able to get permission from their utility commissions to rate-based those types of 
technologies and start developing their own without federal support”.
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In this context, 
the ARRA has contributed to building the infrastructure for the expansion of solar energy 
as well as direct supports such as a cash grant. 
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Energy Policy Act of 2005, Public Law 109–58, 119 Stat. 594, 2005.
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The solar ITC, which was expected to expire at the end of 2016, has extended 
again through 2021 by the Consolidated Appropriations Act in 2016. According to the 
act, the ITC will be 30 percent by the end of 2019, and it will be adjusted to 26 percent by 
the end of 2020, and to 22 percent by the end of 2021.
Table 16 summarized the major statutes for solar policy. Solar policies have been 
developed as a part of the energy policies for the nation’s “secure, affordable, and 
reliable” energy production. The overall direction of the policies was to increase the share 
of solar energy in the U.S. energy mix. The ITC has contributed this goal by reducing the 
costs of solar energy. Research and development programs have contributed by reducing 
the costs by encouraging relevant technology development. Financial assistance such as 
loan programs has lowered the barriers for the investors of solar installations. This was 
described as “confluence of policies” by one of the experts interviewed.
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Since all the 
policies has served a common goal, solar has significantly grown in the United States. 
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Interview #1 

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