Sunpro Solar Featured In Nola Times Picayune, Solar installers brace for impact as tax credit cap sets in.
Jennifer Larino, NOLA.com | The Times-Picayune
Source and original article: NOLA.com
Marc Jones, co-founder and CEO of Sunpro Solar in Lacombe, is having an unexpectedly busy summer.
In June, he was among hundreds of solar industry workers who fought legislative efforts to end Louisiana’s solar tax credit. Lawmakers ultimately moved to cap the credit — already set to phase out at the end of 2017 — in light of a state budget deficit.
The Louisiana credit is among the most generous in the country, covering up to 50 percent of the first $25,000 spent to install a rooftop solar system. It can be combined with the 26 percent federal solar tax credit for additional savings.
Jones thought the changes might hurt demand for solar. Instead, Sunpro, which installs solar panels across south Louisiana, has seen appointments more than double in the first half of July compared with last year, he said.
Many customers have been following the news and want to take advantage of solar tax credits while they still can, he said.
“There’s a pretty big push to get solar right now,” Jones said. “The whole industry is elevated as far as people talking about it.”
But Jones fears the upswing may be short-lived.
Louisiana has spent $147 million on its solar tax credit program since 2009, part of the reason state lawmakers moved this summer to cap spending on credits for purchased systems at $25 million through 2018. Credits on leased solar panel systems were also capped. The new rules took effect July 1.
Estimates from the Department of Revenue show solar credit claims are still below the $25 million threshold. But it is not clear how many people are waiting in the wings, either to finish paperwork or are just now purchasing a system. Much of the solar industry expects to exceed the cap by early next year. Solar installers like Jones say they want more clarity on how the solar tax credit will move forward.
In the meantime, many are bracing for the expected drop in business by trimming costs and jobs. Some are considering expansion plans to generate more out-of-state work, particularly in states where incentives are more stable.
To keep in mind:
Jeff Cantin, president of Solar Alternatives, a New Orleans solar company, and a spokesman for the Gulf States Renewable Energy Industries Association, said solar firms statewide are cutting workers in light of the tax credit changes. The industry supports about 3,600 workers in Louisiana, according to GSREIA estimates.
Cantin said Solar Alternatives, still has work, but has cut several installation positions. The company peaked at 35 employees in early June. Solar Alternatives already does some businesses in Mississippi. It is considering expanding into other states to counter local work lost, Cantin said. “We are adapting but it’s extremely painful,” Cantin said. “We’re going to lose so many jobs and it’s all really unnecessary.”
Jones and Cantin said uncertainty over how the state will implement the solar tax credit moving forward makes it hard to plan.
“We are adapting but it’s extremely painful.” — Jeff Cantin, president, Solar Alternatives
First come, first served
The new law caps credits for purchased solar systems at $10 million this year and next year. That goes down to $5 million for the 2017-18 fiscal year. The cap on leased system credits is structured in the same way, though with an additional $19 million retroactive limit on 2014 credits.
Taxpayers have submitted more than $1 million in claims for solar tax credits on purchased systems for the current 2015-16 fiscal year, leaving more than $8.9 million in available credits, according to estimates the Department of Revenue sent to NOLA.com | The Times-Picayune.
Comparatively, the department counts $2.6 million in tax credit claims submitted for leased systems. That includes credit applications carried over from last year and new submissions filed for the current fiscal year.
Still, there are questions. Could the state reach the cap sooner than expected? In what order will credits be handed out? Could customers who file a claim a day too late be denied?
Jones said the lack of answers is frustrating. “They really left the door open for a lot of confusion,” he said.
In an email, Kizzy Payton, a Department of Revenue spokeswoman, said the agency will provide monthly updates on the amount in claimed and submitted solar tax credits on its website moving forward.
Track Department of Revenue data on the Louisiana solar tax credit here.
Payton said credits will be granted on a first come, first served basis, with order determined by the date the state receives each individual income tax return. Claims filed after the annual cap is reached will be carried over to the following year. If claims received on the same day together exceed the cap, the department will use a formula to divvy up the remaining credits proportionally, she said.
The deadline signals an opportunity for Alex Landau, co-founder of QuickSolar, a New Orleans-based software company that offers design tools for solar contractors.
QuickSolar lets users drag and drop digital images of panels onto a Google Earth image of a rooftop to visualize what solar would look like on their home. The software also provides cost and savings estimates.
Landau said there is a “mad scramble” in Louisiana to get solar installed before the tax credit runs out. He said demand for quick and easy-to-use design software is rising.
QuickSolar started offering free consultations directly with homeowners in June. Landau said he hopes to boost the QuickSolar profile and its business nationwide. Cantin said the solar industry will continue to push for policies that support the growth of solar in Louisiana, including tax incentives.
In Lacombe, Jones said Sunpro looks to expand to Mississippi and eastern Texas by the end of this year. Texas offers solar rebates for solar panels installed.
He sees a growing market for solar in Louisiana despite the tax credit changes. He noted solar materials are getting cheaper and consumers are more educated about their options.
“I think we can offer a pretty strong value still,” Jones said.