Louisiana to begin paying out solar tax credits; industry future uncertain

    Homeowners who bought expensive solar panel systems believing a state tax credit program would help recover some of the cost can breath a sigh of relief. After seeing the program revoked in an effort to save money, Louisiana is reversing course and will soon begin paying out on the promised tax credits.

    Louisiana Department of Revenue Secretary Kimberly Robinson briefed a small group of solar industry leaders today on the details of the Legislature’s recent decision to begin paying out the tax credits. The 50% income tax credit was instituted three years ago and promised to more than 2,000 people. It was then capped in 2015, leaving homeowners who installed solar panels on the hook for thousands of dollars.

    “The caps that were instituted in 2015 created all kinds of issues,” Robinson told the Gulf States Renewable Energy Industries Association. “There’s been a lot of outcry from purchasers who purchased systems before the law changed.”

    The move to pay back tax credits will likely give relief to all homeowners who were told they could get a tax break for installing solar systems. But it may not be enough to save a solar industry in Louisiana that was propped up by the state incentive then roiled by the abrupt changes.

    “They’re not reinstated in any fashion that helps business progress. They’re reinstated to not hurt those individuals,” says Craig Page, co-owner of Optimize Energy Generation Solutions, a Baton Rouge-based company.

    The legislation authorizing payments only applies to people already approved in past years for solar projects who did not get their money. It does not apply to new solar systems.

    At the end of 2014 and beginning of 2015, Page says his company was installing five solar systems a week as homeowners rushed to take advantage of the tax program.

    The following summer—in 2015—the Legislature capped the credits. The next year, Optimize only installed six solar systems. This year, Page says it has not installed any.

    Instead, Page and his partner have completely rebranded the company and shifted the focus to generators. The tax credit issues, along with a bad reputation generated by shady companies who scammed customers, dried up the market.

    “It put a lot of companies out of business. Fortunately for us we kind of saw the writing on the wall and started making transitions,” Page says. “We spoiled the market.”

    The state will begin paying back credits in December and the installments will continue until 2020. The new payments are eligible for people who installed solar systems before Dec. 31, 2015.

    Read a recent Business Report feature on Louisiana’s solar tax credit program.

    —Sam Karlin

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