It is official. (Signed by the governor on 6/19/15) (originally posted here 6/17/15)
1. HB779 is law – The systems installed after 7/1/15 may get a maximum $10k tax credit (down from $12,500). “May” is because of #2.
2. The annual tax credit is capped at $10 million per fiscal year for systems sold that calendar year. There is a $25M total program cap.
3. $10 million total credits will be issued in 2016 (for 2015 systems) starting in 1/1/16 based on the order in which they are received. When the 2016 funds run out, any credits remaining will roll to the front of the line for the $10M of 2017 funds. The $5M remaining in the 2018 budget will be available for the remaining credits, and if there are more credits than funds the funds will be dispersed pro-rata.
4. This information has been confirmed by the Louisiana Department of Revenue and a “Revenue Information Bulletin” was issued with more detail on the credit.
Most importantly, file early next year to get your place in line for your credit.
Background: Here’s what happened that got us here. Representative Ted James House Bill 510 (to kill the solar tax credit and possibly leave more money for his pet projects) did not make it out of the House. Nice work everybody!
We supported the Ponti Bill – House Bill 779 , which made it out of the house (with amendments). True, it cuts our solar tax credit 20% but was supported by the solar industry to help the state budget by saving millions and saving the solar tax credit. However with the senate finance committee amendments totaling $44 million to allow leasing for 2 more years, the bill did not save much.
The leasing lobby, assisted by idiots trying to help, caused the Ponti bill to be amended to GIVE leasing $25M PLUS $19M for their “first of the year” sales. That’s $44M for basically ONE COMPANY, POSIGEN.
Some have estimated that $19M of the $25M was already installed by sales companies before the legislation was changed. If this is accurate then that would leave $6M to be shared by 200 contractors customers over 2 years.
$6M credit = $12M Sales (at 50% credit). Divided that by $20k systems = 600 systems. Divided by 200 companies statewide licensed to install = 3 systems they can sell. To make matters worse, this is over a 2 year period, since only $10M is paid out a year. That brings it to 1 system sold per year for each contractor.
Would you like to guess the number of business closures, lay-offs, drop in permits, drop in sales tax payments, drop in local purchases, etc. this idiotic move caused July 1, 2015? (answer = most all)
***Update (10/22/15) – we are currently meeting and working with LDR to publish an official estimate of the remaining tax credit and we will post this when it is available.
****Update 5/9/16) Based on the totals LDR has published, over $33M in credits for sold 2015 solar systems are pending. There were only $10M available for 2015, and $15M after that, so goodbye credits. When you look at the “leased” $$$ only $3.3M has been paid, and they claim it monthly.
THIS MEANS… The state divided $50M “down the middle” for sold and leased systems. There were a hundred solar installers and only one “leaser”. The money should have been divided more like $45M / $5M.
THE ONLY LOGICAL SOLUTION…. would be for the legislature, in the next special session, to pool the money (sales and leasing), and PAY OUT ALL THE 2015 tax refunds and with the funds available. Shut it down, pocket the $7M and call it a day.