Louisiana’s once promising solar power industry is on the ropes, as thousands of solar system owners continue to reel from a retroactive state statute that left them each owing as much as $12,500 in installation costs.
While legislation could be introduced this spring to reimburse the owners, solar installers tell Business Report their industry has been irreparably damaged.
In 2015, an estimated 2,000-plus homeowners paid for solar electric panel systems thinking they would be reimbursed by a progressive state program that promised a maximum “refundable tax credit” of up to half the cost of a $25,000 system. However, that same year Act 131 of the state Legislature capped the remaining available credits at $25 million and made the cap retroactive to the beginning of 2015.
In effect, the “first come, first serve” credits had already run out by the time many had filed their tax returns.
“The rules were changed after people have already purchased systems and they were basically defunded,” says Jeff Cantin, president of the Gulf States Renewable Energy Industries Association, an industry lobbying group. “These are families that spent thousands of dollars on a solar system and expected to receive a certain amount from the state, and the state pulled the plug.”
Shockwaves rippled across the state in 2015 and 2016 as homeowners realized the tax credits had run out, resulting in a tsunami of petitions to the Louisiana Board of Tax Appeals and a class action suit being filed in the 19th Judicial District Court in Baton Rouge.
All decisions on the matter have been postponed as they await legislative action this spring to rectify the problem. State Rep. Franklin Foil, R-Baton Rouge, plans to introduce a bill during the fiscal session to reimburse those affected by the retroactive portion of the legislation, although he admits it’s a tough time to come up with the necessary $15 million to $20 million.
“I’m going to have to find the money, and I haven’t figured out exactly where I’m going to draw the money from yet,” Foil says, adding his bill will seek to “make everyone whole. It puts them back to where they would have been before the law changed.”
Baton Rouge attorney Brandon Juneau, of Bryson Law Firm in Baton Rouge, says his firm has up to 50 clients who filed similar petitions with the Board of Tax Appeals. Juneau says he has heard the governor’s office, LDR and Legislature all want to fix the issue, but the major obstacle—as it so often is—remains finding the money to do so.
Regardless of how it plays out, Matthew Newman, managing partner of Optimize Solutions LLC in Baton Rouge and a GSREIA member, fears it’s too late to revive Louisiana’s solar industry.
“That was the death knell for most solar companies,” Newman says. His company has since shifted its focus to generator installation and spent the past 18 months building a new customer base.
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