Congressional Budget Office (CBO) annual PTC and ITC estimates are split between the extension of existing credits and the commencement of new ones
Using a number of government sources and the new CBO guidance, we estimate total wind & solar tax credits will be approximately $300 billion between 2006 and 2031
Historical wind & solar generation and $/MWHr of tax credits are utilized to estimate IRA-implied generation changes through 2031
Renewable Tax Credits
Using data from the U.S. Department of Treasury, Congressional Research Service, CBO and Energy Information Administration we estimated U.S. renewable tax credits back to 2006 and utilized the IRA forecasts through 2031.
Annual PTC and ITC expenditure disclosure is murky and the data can be conflicting, but we think $300 billion in renewable energy subsidies is in the right zip code over a 26 year period.
Acknowledging PTCs and ITCs can be utilized for more than wind & solar power, we nonetheless calculated the amount of annual tax credit subsidies by combined wind & solar generation to calculate $/MWHr of credits spread across most of the renewable energy generation base.
It is easy from there to work backwards to estimate combined wind & solar generation through 2031, which nearly triples from 2022.
Assuming U.S. power generation flatlines between now and 2031, we can see the share wind & solar have of total generation in this scenario.
Many others are doing more complex modeling to estimate wind & solar growth as a result of the IRA, but this framework should provide a reasonable outcome. We'll do additional sensitivities in upcoming work.