Solar Tax Credits in Jeopardy

TAX CREDIT IN JEOPARDY!!!(2-22-2012)

Your Public Service Commissioner, Clyde Holloway sent out a letter on 2/15/2012 calling for the Louisiana Legislature to Cut Solar Subsidies.  Read it here:  Commissioner Holloway’s Call to Cut Solar Subsidies

*********LSES Director Jeff Shaw Response to Commissioner Holloway’s office on 2/22/2012:**********

Karen,

RE: Louisiana Public Service Commissioner Clyde Holloway Calls on Louisiana Legislature to Cut Solar Subsidies

I received a copy of Commissioner Holloway’s negative position letter on solar subsidies dated 2/15/2012 and wanted to respond to it.  I trust you will pass my comments on to him. 

I am the founder and director of the Louisiana Solar Energy Society, a 501(c) 3 non-profit organization (www.lses.org).  Our purpose is to educate the people of Louisiana about the benefits of solar and to promote solar growth here since 1999.  We support our state legislature who had the wisdom several years ago to put in place the best in the nation tax credit for residential solar power systems.  This could not have come at a better time for our state.  In the economic downturn of construction our state went from just two to 200 solar contractors!  Each of these Louisiana licensed general contractors are responsible for hiring personnel to install these systems as well as paying use tax on all the equipment.  These contractors are buying permits, electrical and plumbing supplies and many other local materials.  This tax credit, like the Film Industry Tax Credit has brought jobs to Louisiana people when we needed them the most.

 When solar first started picking up the only financing options were cash and home equity lines (or loans) and therefore many average homeowners could not take advantage of the tax credits.  This changed about two years ago when most solar companies began to offer “no money down – same as cash” financing.  This opened up the purchase of solar power systems to most homeowners with no money out of pocket.  It also gave them a year to receive their Federal and State income tax credits before the loan was due.

It is important to note that ALL tax credits are subsidized by all taxpayers.  These include energy efficiency improvements, film industry incentives, historical preservation credits and others that might not seem like they benefit the individual taxpayer.  When we look at solar however, we find that solar power systems actually HELP lower all ratepayers electricity!  Solar energy systems that are grid tied (net metered) provide clean electricity to the grid at times when the utility companies need it the most, during peak sunlight hours.  This keeps them from having to purchase power from outside the state at higher rates to supplement the peak power they need.  That’s why you don’t see utility companies fighting solar power.  This fact makes Commissioner Holloway’s first reason to object null.

 Commissioner Holloway’s second reason for objecting to solar “rebates” (they are actually tax credits and not rebates) is completely wrong.  His explanation of net metering is completely wrong as well.  Let me try to explain.  A net metered solar power system generates electricity when the sun shines on the solar panels which back-feeds the main electrical panel on the residence.  In most cases the power generated offsets some of the usage.  A solar ratepayer pays their “fair share” of the costs to generate traditional power in the same way as someone that practices “energy conservation” and has a low bill does.  All ratepayers pay their share of maintenance and upkeep based on the number of kilowatt-hours they purchase.  Solar homeowners are providing their excess power generation to the utilities during peak times at no additional cost to the utility.  In other places around the country green, renewable energy sells for a premium above typical nuclear or natural gas generated power yet we are a net metered state.  If we switched to “feed-in tariffs” like our neighbors on Tennessee Valley Authority (TVA) power, solar homeowners would be paid a premium for their excess generation.  If you would like to discuss migrating Louisiana from a net metered state to a feed-in tariff state I would be glad to.                            

 Also incorrectly claimed in the position letter was that Louisiana was a “modest solar state”.  This could not me more incorrect.  The only location in the US that receives more average sun exposure than Louisiana (5 hours per day annual average) is the desert southwest.  This can be confirmed at numerous websites like the National Renewable Energy Laboratory.  http://www.nrel.gov/gis/solar.html

 I am going to copy and/or forward this email to other interested parties in this negative misinformation on solar. 

 I look forward in discussing this more with you at your convenience and hope that with the correct information you will revise your position on solar.

 Respectfully,

 Jeff Shaw – Director

Louisiana Solar Energy Society

jeff@lses.org

www.lses.org

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