Solar panels

The use of solar panels for homes is recommended by the environmentalist but there are unintended consequences. The Smiths have a family income of $400,000 and they pay $100,000 in income taxes. They live in a large home in the burbs where they want to install solar panels. The chose to put them on the lot next to their home at a cost of $50,000. They will receive a $30,000 tax credit meaning they will only pay $70,000 in taxes this year. This credit is called non-refundable because you can only take credits up to the amount of tax you owe. These panels not only save the Smiths $200 per month on their electric bill they generate excess power which is sold back to the power company giving the Smiths an extra $100 per month. The Jones earn $60,000 per year but they pay no income tax so if they want to install panels they get no tax credit so they are not interested. The power company now has to charge more for their product and thus the low income Jones are subsidizing the high income Smiths. Don't worry though because the Smiths neighbors object to the panels as they are ugly and will lower the value of their homes. These are the same neighbors who live in large houses with large lots and commute to work in their large cars.