Tuesday, December 29, 2015

Review of Red Notice

Red Notice is a book about Bill Browder's attempt to create an investment company in Russia, the theft of his fund by Russian authorities, and the murder of his lawyer by the same Russian authorities.    The book describes Bill Browder's campaign to sanction the Russian authorities responsible for Sergei Magnitsky's murder.

The book reads like s suspense novel, starting from a scene where Browder is detained in a Russian airport.    It describes how the grandson of  the leader of the Communist Party in America became a leading capitalist investor in Russia after the fall of the Soviet Union and then a critic of corruption and an advocate for human rights in Russia.

Browder's campaign on behalf of his murdered lawyer led to a law sanctioning the Russian officials implicated in his murder and to retaliation by Putin


Comment One: Why was it possible to sanction Russian authorities for the murder of Magnitsky when other events in Russia were ignored.   I am not sure.   Part of it was Browder's persistence and his extensive documentation of the involvement of Russian authorities in Magnitsky's murder.   Part of it was that people were more easily able to put themselves in Magnitsky's shoes a tax lawyer simply doing his job, not a political foe of Putin the typical Russian murder victim.

Also, Russia gained access to the WTO and Congress got rid of the Jackson Vanik 
amendment, a human rights law from the Cold War era when the Magnitsky Act was created.


One of the reason the Magnitsky Act passed Congress is that American politicians needed to cover their asses while allowing expanded trade with Russia even though Russia continues with human rights abuses. 

Comment Two:I miss the cold war era where we had Democrats  like Henry Jackson and Edlund Muskie who had a genuine belief in human rights.   Congress was forced to pass the Magnitsky  Act because the Obama Administration was refusing to implement sanctions against the Russian authorities under existing law.   Browder does a good time documenting the resistance of the Clinton State Department and the resistance of John Kerry in the Senate to even these modest sanctions agains the Russians.

There is a really funny description of a meeting between Browder and  State Department officials on how to punish the Russians over their torture of Magistky,  One official sits there and says nothing but takes copious notes.   The other official is so proud of his decision to include a two-paragraph discussion of the Magistky murder in the annual State Department human rights review.   He becomes completely astounded at the request for sanctions against Russian officials because this was the era of the reset button.

There is a reason why the Secretary of State until Hillary does not run for President after his or her tenure.   The job results in decisions that lead to political baggage.  Clinton's inability to sanction Russians clearly implicated in murder and torture is a classic example.

The lack of interest in human rights now that Russia is just a corrupt totalitarian place and not an existential threat also describes the view of many leading Republicans on Russia.   The most recent evidence on this is Trump's Bromance with Putin.

Comment Three:  Western investment in Russia continues despite the looting of Browder's fund by Russian authorities.   Witness the existence of this ISHARES Russian ETF.

Comment Four:   One of the strange ironies of this book is that if you google the name Browder you first get articles on Kalief Browder,


Kalief Browder was a New York teen who spent three years at Rikers Island getting beaten by guards for allegedly stealing a backpack.  He killed himself after finally getting out of jail.    There is clearly prison abuse in the United States as well as Russia.  These actions are brought up whenever we criticize the Russian for their abuses.   The issues are of course separate and need to be viewed independently.   Two wrongs don't make a right or a better world.

Readers of this blog may also want to see my post on the Republican view of health care after Obama.

Saturday, December 26, 2015

The Abdication of the Democratic Party

Campaigns and elections are important because they involve laying out choices to the people.   Historically, the Democrats have had a vigorous debate over issues.   The campaign in 1992 where Bill Clinton won the nomination was a classic.   Bill Clinton had Tom Harkin on his left arguing for a more extensive safety net and Paul Tsongas on his right arguing for fiscal responsibility.   Bill Clinton was able to persuade the voters that he could balance both priorities but only because he was on a stage where he had to explain how he differed from rivals.

Hillary has Bernie Sanders on her left and she is getting as close to the Senator has possible to insure that she gets the nomination.   The banal debates are rigged in Hillary's favor.   The Democratic debates offer no sense of how the party would solve problems or pay for its proposals.

Here are some examples:

Sanders wants a $15 per hour minimum wage while Clinton wants a $12 hour minimum with discretion for different state minimums.   The truth is both proposals would have only a modest impact on income inequality.

CNN in the 90s was given the moniker "Clinton New Network"    They showed why in the first debate when the emphasis was placed on whether a Socialist could win the general election and on Sanders gun control history rather than Clinton's weaknesses like her inability to shape the Pacific Trade Agreement when she was Secretary of State an agreement that she now opposes.

Sanders and Clinton both presumably want to expand Social Security,  The issue of inadequate retirement income and estimated shortfalls in Social Security need to be discussed in tandem.    However, once Social Security revenues fall due a certain level due to population aging there will be automatic cuts to Social Security revenue.   None of the Democratic candidates have been asked how they will simultaneously fix both our flawed private pension system and the imbalances with the Social Security system.

The only Wall Street issue that comes up is the proposal to restore Glass Steagall and separate the banks from other firms.  Sanders supports repeal.   Clinton opposes repeal.   Let's be honest repeal is not going to happen.  It would be impossible to tear apart the large financial conglomerates that have already been created.

But let's not make the problem worse.   The Obama Administration and a lot of Senators from both parties currently support getting rid of Freddie Mac and Fannie Mae and giving the housing agency functions to the large banks.  See the New York Times article on the topic.


The proposal to give the housing guarantee market to Wall Street would make the banks that are too big to fail even bigger.   This issue has not been discussed.   Why is it less important than Glass Steagall?

Sanders has  not pressed another financial area where he and Hillary differ the 2005 bankruptcy reform law.   The 2005 bankruptcy law made a large number of changes to bankruptcy law all in favor of creditors and against the interests of debtor.

One of the more significant changes in the law was that it made it more difficult to file under chapter 7 of the bankruptcy law and obtain immediate debt relief.   Many people believe that this provision of the new bankruptcy law increased the severity of the mortgage crisis because over-leveraged homeowners without access to bankruptcy relief on credit cards had no choice but to walk away from their mortgages.

A second change of the bankruptcy law was to make it much more difficult to obtain forgiveness on private student loans.   It has always been difficult to obtain bankruptcy relief on government backed student loans.   The 2005 law provides the same terms on private and public-backed student debt in bankruptcy.

Hillary Clinton was lobbied hard by both supporters of the new law (credit card companies and banks) and critics of the new law.    She voted with Wall Street for the new law.   I guess she thought Wall Street still needed help because of 9/11.

The ACA has done a lot of good but problems persist.   The federal share of the Medicaid expansion is slated to decrease over time.   States that have added the Medicaid expansion will have to add taxes to continue current benefits.   The Republicans have not offered constructive alternatives to the ACA an essentially conservative law but the Democrats need to both call out the Republicans on health care and offer viable improvements to the ACA.   Neither has happened in the debates so far.

Hillary is owned by the teachers union.  A lot of Democrats and Independents would like to see some accountability and competition in education.   This issue is going to come up in a general election debate but has been ignored in the intra-party contest.   This may be a sleeper issue in November 2016.    The Democrats would be in a much better position if they discussed alternative approaches now.

There are a lot of ambitious Democrats who want to be President who chose to sit this one out because they think it is Hillary's turn.    The DNC is attempting to clear the path for Hillary.   The people lose when debate is stifled.   I am fearful that the decision to give the nomination to Hillary in 2016 and avoid substantive debate on issues may continue to define the party in 2020 and beyond.

People interested in this blog may also be interested in my post on how conservatives are approaching the health care issue after Obama.


Sunday, December 20, 2015

The Right-Wing View of Health Care After Obama

The Right-Wing View of Health Care After Obama

A recent post on Health Affairs Blog “Improving Health and Health Care:  An Agenda for Reform” lays out the Republican and Conservative vision and agenda on health insurance reform after the ACA.  The article covers a broad range of health issues and topics – laying out overall principles for reform, discussing ways to replace the ACA, discussing potential changes to Medicaid and Medicare, and advocating a tremendous expansion in the use of health savings accounts.

Some of the proposals that caught my eye include:

  • Retain the existing federal tax credit but limit the credit at the 75th percentile of employer plan cost.  The new limit replaces the Cadillac Tax.
  • Create a refundable tax credit for people without coverage that is age-based roughly equivalent to the average tax subsidy for an employer plan.  The proposal discusses issues related to whether this tax credit should be linked to household income.
  •  Allow states to establish health plans eligible for the federal tax credit.
  •  Remove the guarantee of coverage for people with pre-existing condition.   Replace this guarantee with some limits on premium changes for people with continuous coverage. 
  • Allow states to adopt a default enrollment program.
  •  Allow for a gradual transition from ACA subsidies.
  • Gradually raise the Medicare Age to 67.
  • Give states substantial control over how Medicaid expenditures are paid.

The Health Affairs article is a good description of the Republican viewpoint on health care and it is a potential outline of policies that are likely to be adopted if Republican win the Presidency in 2016 and hold onto their control of Congress.

 This post comments on some of the many principles and proposals in this article.

Citation for Health Affairs Article:

“Improving Health and Health Care: An Agenda for Reform”


Comment One:  The authors of this piece believe strongly in transferring power over health policy from the federal government to the states.  I wonder how committed they would remain to this principle of federalism if a state passed and enacted a single-payer system.   Such a plan would substantially disrupt employer- sponsored insurance for firms with offices in multiple states.

Similarly, different rules on the ability of people with pre-existing conditions to get health coverage could affect movement of people to new jobs or career opportunities across state.   In theory, some states could be given the right to base insurance premiums on the health status of the individual but the workability of such a proposal would likely require modifications to the federal tax credit.

The allowance of different state rules for Medicaid creates an incentive for sick poor people to move from one a state with low benefits or strict eligibility requirements to a state with higher benefits to laxer eligibility requirements.  This of course is the current situation because many states have opted out of the ACA Medicaid expansion.

Comment Two:  The authors propose to retain the federal tax credit and limit the tax credit at the 75th percentile of the employers plan cost.   The limitation of the tax credit replaces the Cadillac Tax.  The paper calls the Cadillac tax credit poorly designed and unfair but does not offer any evidence supporting their view that the 75th percentile limit is superior or fairer than the tax in the existing statute.  Empirical work elaborating on the difference in outcome from the proposed limitation to the 75th percentile of employer cost and the elimination of the Cadillac tax credit would be highly useful.

Comment Three:  The ACA provides a tax credit for lower-income people on exchanges.   The proposal would replace the current income-based tax credits with a refundable tax credit for all people without an ESI offer.   The proposed credit is age based and roughly equal to the average tax subsidy for an employer plan.

The tax credit proposed in the HSA paper is broader than the existing income-based tax credit.   This policy change could encourage some firms to drop ESI coverage so all of their employees could claim the tax credit.  Whether this would happen depends on whether the employer mandate was implemented.

The proposal allows states to restrict coverage for people with pre-existing conditions and allows states to base premiums on the health status of the applicant.  A reduction in ESI coverage and the changes in underwriting rules could result in insurance being unavailable for some sicker people in some states.  However, some firms may respond to the new coverage impediments by keeping ESI coverage.

Comment Four:  The proposal does not rule out the possibility of linking a tax credit to income.   The authors correctly point out that the linkage of a tax credit to income makes the tax credit harder to administer and discourages work over some income intervals.   Also, the current tax credit scheme results in some households owing the government if they earn too much during a year.

The creation of a general tax credit for all people without an ESI offer combined with a smaller tax credit linked to income could reduce some of the administrative problems with the current tax.   In particular, a hybrid tax credit could reduce the number of people who owe the government a refund of the ACA credit and the size of some refunds.

Comment Five:  In the ACA debate, Democrats wanted health insurance premiums linked exclusively to age and Republicans wanted state government to choose whether premiums should be linked to age or partially linked to health status.    The debate on permissible premium underwriting should have been linked to alternative tax subsidy schemes.  It would make more sense to allow for premiums based on health status if part of the tax credit was also linked to health status.  

A tax credit for people who have poor health might be more easily verified than a tax credit for poor people.   However, it would be difficult to administer different federal tax credits for people in different states.  

Comment Six:  One of the guiding principles of the proposal is to put government health care subsidies in the form of defined contribution benefits.  Another proposal is to improve the federal budget outlook by reducing long-term health expenditures.    These two goals are in conflict.

The proposal includes a 2017 tax to jumpstart the HSA market.  This tax credit seems arbitrary almost capricious.   Why 2017?   Is this fair to the person or the cohort who enters the workforce in 2018?   This tax credit is likely to be very expensive.

A small number of health care cases are the source of disproportionate amount of health care spending.   Health savings accounts have no impact on these expensive cases; hence, HSAs have a modest impact on premiums.   It will almost certainly be the case that the increase in spending on tax credits to fund HSAs will exceed reduction in costs from changing spending incentives or reduced premiums.

Allowing people to inherit HSAs is an additional reduction of the tax base with little gain to society.   It also creates randomness to end-of-life financial outcomes.  A family with a person who dies quickly inherits a lot of money.   A family with a person who lingers could experience additional costs.   (The extent of the additional costs would be affected by many of the Medicare reform items in the proposal.)

Comment Seven: The proposed expansion of HSAs would have a large unanticipated impact on contributions to 401(k) plans and funds available for retirement. Currently people over 55 can make extra contributions to 401(k) plans   Many people do not make the maximum allowable contribution to their 401(k) plan choosing instead to use scarce funds to pay off consumer and student debt.  The relatively few people who make these extra contributions already have large retirement accounts.   It will likely be the case that the largest source of HSA contributions will be reductions in 401(k) contributions or increase in consumer borrowing rather than new savings. 

Comment Eight: The proposal calls for the use of HSAs for Medicaid patients.   Many but not all Medicaid patients are poorly suited for HSAs especially if the account is linked to a high deductible plan.   The ACA does force some people with income below the poverty line into Medicaid.  In some cases, these people have financial assets and would prefer a private health plan instead of Medicaid.  I believe the ACA rule banning people with income below the poverty line from access to state exchanges should be eliminated and that these people should have access to ACA tax credits and be allowed to use high deductible plans if they so choose.

Comment Nine:  The article does not mention the individual mandate but does mention a default insurance option for people without coverage.  Maybe people who refuse to pay premiums should be restricted to catastrophic coverage for a period of time instead of being forced to pay a fine that they cannot afford.  More work is needed by all sides of the health care debate on the issue of what needs to be done when people refuse to obtain coverage.

Comment Ten:   The proposal to raise the Medicare age to 67 would increase private insurance costs.     Also, many older workers are struggling to remain in the job market.  At the end of a career wages tend to fall and unemployment tends to rise.   it may be the case that older workers just trying to hang on are displacing younger more productive colleagues.   This proposal could exacerbate labor market problems.

Concluding Thoughts:  I love reading about policy and politics but I find the discussion of the ACA incredibly demoralizing.   The Republicans are focused on bashing Obama and regaining power.   This article is very much in that Republican tradition of stressing politics over pragmatic choices. They could probably get substantial changes to the ACA without pressing for a complete overall. 

The ACA is flawed.  Part of it like the health care cooperatives and the long term care proposal either failed or was not even implemented.   After the 2008 landslide, the Democrats should have been able to implement a partial government option.   They would have done better in 2010 had they done so.  Right now the Democrats are in the position of cheerleading a flawed law rather than seeking improvements.

I hope readers will consider some of my books on Kindle:

Nine essays on Debt and Your Retirement:

Things to consider before purchasing long term care insurance:

Student Loan Forgiveness

Wednesday, October 28, 2015

The Introduction to Student Loan Forgiveness

This post is from the introduction of my report student loan forgiveness.   A full copy of the report can be found on Kindle.
There is a free promotion for the five days 10/29/15 to 11/02/15.

The Introduction to Student Loan Forgiveness

A constant flow of official reports and news articles document the growing student debt problem. Standard & Poors found that student debt grew 10% per year since 2003 reaching $904 billion at the end of the first quarter of 2012.  Student debt outstanding is now higher than credit card debt or automobile loans outstanding.  A recent New York Times article highlighting the growing use of debt collectors to recover funds from defaulted student loans found that one in six borrowers were in default, the total dollar volume of defaulted loans was $76 billion, and that the Education Department paid $1.4 billion last year to collection agencies and other groups to collect defaulted student loans.  A Wall Street Journal article analyzing government data compiled by the Treasury Department found that from January through August of 2012 115,000 people had funds from their Social Security check garnished to pay off student loans compared to 60,000 cases in 2007 and only 6 such cases in 2000.

The current generation of students is leaving school more highly leveraged than any previous one.  While education remains a good investment for the average student borrower, some students will never be able to repay their student loans in full.  Moreover, current bankruptcy law and procedures make it very difficult for borrowers with student debt to ever obtain a fresh start.  There is some interest in policies that might alleviate student loan debt burdens.  However, this interest is tempered by the concern that the provision of debt relief to student borrowers would impose large costs on taxpayers.  

This paper considers the possibility of changing policies and laws in order to make it easier for some highly leveraged students who are experiencing substantial economic hardship to have some or all of their student loans forgiven.  Three programs or policies – (1) the Income Based Replacement (IBR) loan program (2) the discharge of student debt in bankruptcy, and (3) the treatment of student debt in chapter 13 – are assessed.

My assessment of the IBR program reached the following conclusions:

·      The primary purpose of the program is to prevent students from defaulting on their student loans by reducing loan payments in years that the student debt is high relative to disposable income.  Under current rules, relatively few borrowers with chronically high levels of student debt relative to income will qualify for debt relief after 25 years.

·      Some analysts are concerned the IBR program will motivate some students to borrow more.  However, the amount of debt that is forgiven under IBR depends upon the lifetime income of the student borrower’s household, which is difficult to predict when a person is in school.  A modified less generous IBR program that offered a lower level of debt relief rather than complete loan forgiveness would not create a large incentive for increased borrowing.  

·      The take-up rate for the IBR program will be smaller than anticipated.  First, not all loans are eligible for the IBR program and borrowers who do not know the rules when taking out or consolidating loans will lose access to IBR benefits.  Second, some borrowers will choose a 20-year consolidated loan over a 10-year loan that is eligible for reduced IBR payments.  Third, most married borrowers will not choose to maximize IBR benefits by filling separate tax returns because this would increase their tax liability.
·      Individuals with high levels of both student debt and other loans (non-secured consumer loans and mortgage debt) will often gain very little debt relief under IBR despite their high leverage. 
My assessment of the impact of the bankruptcy code on student debtors reached the following conclusions:

My assessment of rules governing the discharge of student debt in bankruptcy:

·      The rules governing the discharge of student loans in bankruptcy are highly subjective.  While outcome differ across courts, in most cases even student debtors in extremely dire economic circumstances have a difficult time getting student loans discharged in bankruptcy.  Since 2005, the stringent rules governing the discharge of student loans pertain to private student loans as well as government-backed loans.

·      The rules governing the discharge of student loans in bankruptcy could be modified to provide limited debt relief to borrowers in extreme financial circumstances without imposing substantial costs on taxpayers.

My assessment of rules governing student debt in chapter 13:

·      The 2005 bankruptcy law forced many student debtors to file chapter 13 rather than chapter 7.   Many student payments can only make minimal payments on their student loans while in a chapter 13 payment plans.    The combination of low payments on student loans and the fact that student loans are not discharged prevents student debtors from obtaining a fresh financial start in bankruptcy.

·      The repeal of the chapter 13 means test would facilitate quicker repayment of student loans and benefit both student debtors and taxpayers.   A rule that provides priority to student debt payments over other unsecured debt payments in chapter 13 bankruptcy will improve the status of student debtors and taxpayers and still leave creditors better off than they were prior to the 2005 bankruptcy law.

·      Modifications to current bankruptcy law designed to help student borrowers will likely accrue to a less affluent group of borrowers than changes to IBR. 
       Concluding Remarks:

The goal of debt forgiveness policies both inside and outside of bankruptcy is to balance two competing objectives – the provision of a fresh start to debtors and fairness to creditors.  The 2005 bankruptcy law resulted in bankruptcy becoming much more supportive of the rights of creditors and less concerned about providing a new opportunity to debtors.  It is now especially difficult for individuals who borrow funds to further their education to obtain debt relief. Several policy changes, including both modifications to IBR and changes to the bankruptcy code, might provide modest debt relief to student borrowers, maintain strong incentives against default, and protect taxpayer interests. 

The full report on student loan forgiveness can be found on Kindle.  It is free for the five day period starting 10/29/15.

Student Loan Forgiveness:

Also, people might be interest in my new book on Kindle

Nine Essays on Debt and Your Retirement.

Thursday, April 23, 2015

Thoughts on the economic viability of solar power

On the Economic Viability of Solar Power

I have been reading and thinking a lot about the economic viability of solar panel.   This post contains some background on the industry and my thoughts on where I believe events are leading us.

Background:   The cost of solar power has fallen and its use has risen in some areas of the world.

Germany remains the leader in the use of solar power where around 7 percent of electricity is obtained from solar units.

By contrast, in the United States solar power accounts for roughly 0.46% of all electricity use.

There is great variability across states solar power capacity in the United States.  Data on total per capita solar capacity for 26 U.S. states sorted by per capita capacity was presented in line below

Arizona led the list with per capita capacity of 166.9.  Hawaii was second at 136.5

Florida, Texas and Georgia states where solar power should be viable based on climate had per capita capacity of 5.8, 5.3 and 2.3 respectively.

Issues related to the use of solar power in Hawaii were highlighted in a recent New York Times article.

A substantial portion of the solar power generated in Hawaii is from homeowner who have added panels to the roofs of their homes and who sell excess energy to the utility.  Solar adversely impacts utilities in two ways – (1) by reducing revenue and (2) by increasing costs associated with reclaiming power. Utilities in Hawaii stopped accepting energy from new homes with solar panels.   The state regulator recently ordered the utility to accept all customers.  Utilities are also pressing for fees applied to residences with solar panels to pay for the infrastructure needed to accept the new energy

Comments on Factors Impacting the
Growth of Solar Power

Comment One: Utilities claim they should be able to charge homeowners for the costs associated with accepting power generated from solar panels on roofs.  Utilities also want to be able to refuse to accept this power. Tesla appears to be very close to the announcement of a new battery that will effectively store energy and allow many homeowners with solar power to leave the grid.

Comment Two: Energy storage costs could be further reduced if homeowners share the costs of the battery purchase.   An independent firm that owned a battery storage unit could store excess energy for a group of homeowners for a fee.   Alternatively, it may make economic sense for homeowner in adjoining houses to share the cost of the battery purchase.  

Comment Three: One way to fund battery storage projects would be through the PACE program.   The PACE program allows companies to fund environmental projects by issuing bonds that are backed by assessments on homeowners.  Under this program a community could fund the purchase of batteries that stored excess energy from all solar panels in the industry.   Unfortunately (from my perspective) the Federal Housing Finance Administration ruled that mortgages issued in communities with PACE loans would not be eligible for Fannie Mae or Freddie Mac loan guarantees.   This ruling killed the PACE program given the dominance of Freddie Mac and Fannie Mae in the mortgage market.

My thoughts on the FHFA decision on the PACE program are presented below.

Comment Four:  It is apparent that the cost of solar power generated from roof top panels has fallen.   However, I am not sure that a properly done cost benefit analysis would motivate me to purchase a solar system at this time.   The primary reason for my caution is uncertainty about costs of keeping the system in working order and the likely usable life of the system.   Maintenance costs could overwhelm the potential savings from the system if say hail breaks panels.   Also forecasted savings might not be realized if the usable life of the system is shorter than expected.

Comment Five:  Gains from the sale of solar systems could be very large if the homeowner with the solar panel also owned an electric vehicle or was able to charge EV car owners for electricity generated from the Solar panel.  

Comment Six:  One way to take advantage of solar power without incurring the costs of putting solar panels on your roof is through solar sharing program.   Under a solar sharing program, people buy a share in a company that builds a solar generation unit  in exchange for a reduction in their utility bill.  See details of Solar sharing programs below.

Utilities would still lose revenue from the growth of solar sharing programs.  However, solar sharing does not force utilities to purchase excess energy.

Comment Seven: A number of factors influence the state supply of solar generation including – 1) weather, 2) rules governing right of homeowner with solar power to sell energy back to the grid, 3) cost of electric utility bills, and 4) state-level subsidies.

The high level of solar use in Hawaii is due to two factors the weather and the high utility costs.

Solar energy has received preferential regulatory and tax treatment in some northeastern states like New Jersey and New York but the use of solar panel in these states is limited due to weather and strong utilities.

Based on weather you would expect strong solar sales in Texas, North Carolina, Georgia and Florida.   Sales of solar in these states have been reduced by other factors including resistance by utilities.

Comment Eight:  A 30 percent federal tax credit for solar projects on commercial or residential projects currently exists.  The residential tax credit is scheduled to retire in 2016.   The commercial tax credit is scheduled to fall to 10 percent in 2016.

Tax issues are often arcane.

Not all fuel reduction equipment qualifies for credits so people have to check that equipment is certified. 

Many of the people who receive the residential tax credit pay the alternative minimum tax and will lose a portion of the tax credit.  The impact of the AMT on the value of credits can be substantial.

In some cases, the commercial organization that builds the solar project does not have taxable income to take advantage of the credit.   A separate investor might be able to fund the project and utilize the credit.

Comment Nine:  Some companies have created demand side management programs (DSM), which provide a financial incentive to move electricity consumption from peak hours when it is very expensive to off-peak hours when it is cheap.   Solar power, since it is plentiful during the hot periods of the day, also serves to reduce peak demand.   Solar power with battery storage would reduce both peak demand and off-peak demand.  See the following article on demand side management programs.

A quick search on the web revealed several dated articles on DSM program.  It appears as though utility enthusiasm for these programs varies greatly.  

Concluding Thoughts:

Improvements in technology are increasing the viability of solar energy but there is a lot of opposition from utilities.   In the United States, political support for solar power varies across states and the political environment appears correlated with the growth of solar power.

Elon Musk may have a large impact on solar through two channels.  The Tesla battery may allow homeowners with solar to leave the grid.   The electric vehicle will stimulate demand for solar panels on home by fueling cars at no additional cost.

The growth of cooperative groups that share energy from a common solar grid or share the costs of energy storage would stimulate the sale of solar power, especially in situations where utilities are not purchasing excess power or are imposing additional fees.