If properly targeted, tax incentives have the potential to accelerate innovation in clean energy technologies that are poised to be adopted rapidly.
Tax incentives intended to accelerate the deployment of clean-energy technologies were expanded significantly in the 2000s. However, design flaws and tinkering by Congress has limited their impact on innovation.
The U.S. tax system should be a more powerful tool to accelerate clean energy innovation. Congress should target opportunities when they are ripe, drive the market forward, and sunset federal support as technologies mature.