Yesterday David Asman kicked off his Fox Business show, America's Nightly Scoreboard, by claiming that Solyndra "received a very generous set of tax breaks" from the Internal Revenue Service. Asman emphasized that this was "a tax break applied for Solyndra and only for Solyndra" and suggested that "political influence" may have played a role in the IRS decision.
But the tax credit didn't apply to Solyndra at all -- it applied to a manufacturing facility that was considering installing a Solyndra solar panel system. And this ruling is hardly unprecedented: it is one of many private letter rulings issued by the IRS to clarify which technologies qualify for energy tax credits.
The "tax break" Asman is referring to is a 30 percent tax credit for solar energy systems, which was established under the Bush administration, and later expanded by both the Bush and Obama administrations. A PriceWaterhouseCoopers memo explains that the law "generally provides that buildings and structural components are not eligible" for the tax credit, but allows for exceptions where a structural component could qualify for the credit. IRS guidance issued in 1979 provides an insight into when that exception may apply, stating that "where a structural component of a building is so specifically engineered that it is in essence part of the machinery or equipment with which it functions, the cost of that component will be eligible" for an investment tax credit such as the solar energy credit.
And in the case that Asman is referring to, the IRS determined that this exception did apply. A 2009 private letter ruling stated that the manufacturing facility's "cool roof" qualified for the tax credit because it "enable[d] the generation of significant amounts of electricity from reflected sunlight," and therefore "constitute[d] equipment that uses solar energy to generate electricity when installed in connection with the System."
As Asman correctly noted, a private letter ruling like this one "is particular to one individual or one company". But he failed to mention that the company in this case was not Solyndra. The company's name has been redacted in the IRS ruling, but a memo from Solyndra to its customers indicates that the ruling was granted to "the owner of a manufacturing facility [that] was considering a Solyndra PV panel installation." Solyndra made it clear that the ruling did not necessarily apply to other customers, but PriceWaterhouseCoopers points out that "[m]any roof-mounted solar installations include a reflective roof coating" and that other companies seeking to install similar technology could benefit from the ruling.
Aside from misidentifying the recipient of the tax credit, Asman's suggestion that this ruling was due to "political influence" ignores that fact that the IRS has issued similar rulings for other solar companies seeking tax credits, including for the installation of photovoltaic curtain walls. And a National Review article on the same ruling acknowledged toward the end that "'[c]lean coal' and aspects of nuclear power also have received private-letter rulings."
Fox Nation later took down its post without explanation.