As well it credible research and a vast amount of anecdotal information leads to the conc-lusion that the decision to purchase a PV system is often deferred when legislation is pending. Moreover, once the tax credit is enacted purchases begin to slow well before the end of the program, serving to limit the effective life of the program. Recognition of important qualifiers Analysis and experience suggests that the success of tax credits can be increased by the addition of qualifiers. Generally such qualifiers are believed capable of improving the effectiveness of the tax credit programs. However, qualifiers add to the cost of the credits.
Tax credits represent only one of the policy options available to government.
Each of these options have their benefits, costs and problems. Like any investment decision preference should be based upon a comparison of the various available alternatives. Some representative pros and cons of renewable energy tax credits Pros Lowers the cost to consumers making renewable energy products more competitive with fossil and nuclear energy resources. Encourages investors by increasing rate of return. Indicates government s faith in the technology, thereby helping to diminish the risks perceived by consumers and investors.