Investor and Federal Treasury Returns From Investing in Solar Thermal Energy (SAND-82-8057)

As with any capital-intensive investment, the treasury shares the initial costs of solar-thermal investments with investors by providing a tax credit and depreciation deductions. Solar thermal investments have an additional tax credit called the Business Energy Investment Credit (BEIC). This report seeks to explain the probable returns to the federal government, as well as to third-party investors, from investing in the first commercial central-receiver plants. The results are a function of parameter assumptions (defined in the text) which were obtained from sources within the solar industry and government laboratories. Even with the increased initial cost to the treasury of the BEIC, a positive revenue will flow to the treasury over the lifetimes of the first solar power plants. Solar plant manufacturers need the BEIC to entice initial investors to accept the risk of investing in these plants. Future plants will be attractive investments without the BEIC. The computer code used in the analysis of expected returns is included in an appendix.