A slew of bills introduced in Louisiana’s legislature this year were challenging the state’s solar incentives. At least one of which, House Bill 705 to gradually phase out the state’s solar and wind tax credits by 2020, has moved forward. While that bill might make some sense, other bills, like a bill to eliminate tax credits immediately, seem to be drastic measures that would gut the industry at a time when it’s become a major new employer in the state.
At least nine bills were introduced in the state’s legislature this year, with the overwhelming majority set to reduce or eliminate incentives including state tax credits for renewables. Some, like Senate Bill 231, would change laws in the state and allow for third party ownership of PV arrays. At the same time, the Louisiana Public Utilities Commission has been trying to eliminate net metering in Louisiana, revealing the war that's being waged against solar throughout the southern state.
Some of this needs to happen. After all, the state still allows homeowners to claim a personal tax credit on up to 50 percent of the first $25,000 of a PV array or wind system — that’s on top of the federal 30 percent tax credit. So a $25,000 PV array would only cost a Louisiana homeowner $5,000.
This has led to an explosion in popularity in solar in the Pelican State. According to The Times-Picayune, when the incentive legislation passed five years ago, the incentives were expected to cost state taxpayers about $500,000 a year in lost tax revenue. By the end of 2011, the state gave about $39 million in incentives, and the newspaper reported that HB 705 sponsor Erich Ponti (R-Baton Rouge) said the state gave an additional $24 million in credits in 2012.
Under HB 705, which passed the House on a huge 95 to 1 margin earlier this week, the personal tax credit for wind would be eliminated and the credits for solar electric systems would be phased down starting in 2017 when the level would be lowered to 35 percent of the first $25,000. Three years later, on Dec. 31, 2020, they will be phased out under the legislation.
The Louisiana Solar Energy Society did not respond to a request for comment on solar legislation in the state. The bill heads to the Louisiana Senate next week.
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