End, don't mend, wasteful solar installation tax breaks

With his concession/challenge yesterday abating his tax swap plan in favor of the Legislature's pursuit of something similar, Gov. Bobby Jindal gave clear advice on the direction to head to lower income tax rates if not abolish it: excise tax exemptions he said benefited "special interests." There are several cued up in the Legislature this session for abandonment, but one stands out.

While there are those that argue that Louisiana’s generous solar energy tax credits should be mended, Jindal would seem to think it needs to be ended now along with a few others. Of theseveral bills prefiled that address tax exceptions, around the theme of eliminating non-productive ones, some, like state Sen. Danny Martiny’s SB 231, stand alone in getting rid of this tax credit by 2020. Others, like state Rep. Roy Burrell’s HB 444, go after several of the most wasteful, and in a quicker fashion (end of 2015 in this case) if they cannot prove they are cost-effective.

Of which the solar one most definitively is not. Over the past four years, each year the state has lost on average more than $11 million per year, transferring this to the pockets of a few installers. That savings to households averages out, given statistics on meters installed as what these systems enable owners to do is to put in a meter that allows them to sell energy to providers at times of high generation by solar, to $230 a year per household, but works out to a transfer of $37,825 of business per household to installers.

This greedy bunch defends this by bleating that jobs are created without ever addressing the blatant removal of the people’s money to their private coffers. Special interest shills also try to compare these subsidies to the much larger tax breaks granted to oil companies, as if this constitutes an exoneration of these. Assuming the oil breaks don’t serve the state’s interest, this is akin to the logic in World War II war crimes trials where defenses were mounted for soldiers accused of massacring a few civilians that they should be set free because much larger systematic exterminations of human beings were ongoing by the same regime that instead deserved any punishment. That doesn’t fly: you’re not a little dead, you either are or you aren’t.

And it’s an abuse that that Public Service Commissioner Clyde Holloway wants stopped now, hoping that legislation will come down the pike that eliminates the tax credit this year. As the facts have come out, the industry has gotten so worried that, from defending the existence of the credits lasting in perpetuity just a few months ago, now they’re biting the bullet and falling behind Martiny’s version at least to string out the period of subsidization five years longer. Of course, their ultimate hope is that the more time is bought, the greater the chances are that they can convince legislating away the expiration date.

The industry also takes advantage of the credit, which combined with the federal version can realize 70 percent savings on the first $25,000 spent, to put such systems on smaller houses that are even less economical to make the transformation, simply by writing off the owner payment, enabled as these credits turn out to be so lucrative to generating their business. Still, their main target are larger abodes of the wealthier or those who own multi-family residences, for whom the economics are slightly more beneficial and who generate more sales dollars for the installers. It is, therefore, a credit for selling back electricity mainly to the benefit of the wealthier.

Hopefully, legislators will take one or more of these bills and follow Holloway’s advice. There’s no good reason to enrich a few at the expense of the many. If somebody feels compelled that going solar will save the planet or actually might be cost effective (typical payback is over 20 years, even with the credits), they can do it on their own dime, not the taxpayers’.