Legislation designed to restore a tax credit for Georgia property owners who install clean energy projects is stuck — at least for the time being — in the state House Ways and Means Committee, according to a lobbyist hired by the solar industry to push the bill.
East Decatur Station is one of numerous commercial properties that hired Georgia workers to install solar projects in 2010. (Photo courtesy of Radiance Solar)
“Climb is getting steeper,” lobbyist Jason Rooks wrote me in an e-mail late Friday. “The tax reform package is taking all the oxygen … individual tax credit bills are being held back for now.”
Rooks was referring to the attention that legislators on the tax-writing committee are focusing on a separate, more far-reaching tax measure, House Bill 385.
Previously confident solar advocates are now worried that their own bill, HB 146, won’t have time to pass before “Crossover Day,” the annual deadline for bills to clear one legislative chamber while still having time to get through the other chamber. Crossover Day is expected to fall around March 21 this year.
HB 385, the larger tax bill, was written to implement recommendations from a state tax reform council dominated by leaders of more traditional businesses. The council called for trimming tax breaks targeted at specific growth industries.
Solar advocates launched a campaign Friday to convince the lawmakers and the public that at least their targeted tax break is a good thing for the economy and taxpayers. They noted that Georgia’s clean energy industry, which is dominated by solar, produced jobs during the recession in part because of an existing tax credit. And, they claim, the state already has missed out on job growth because of uncertainty in its renewable tax credit and because of the overall weakness of Georgia clean energy incentives.
“In the U.S., there have been more than $5 billion dollars invested in solar manufacturing since 2008. Georgia has received less than 1 percent of this growth despite a University of Arizona study that ranked Georgia third in solar development potential,” according to a fact sheet distributed by the solar group Friday.
The document also says that “in the last two years, Georgia has actively engaged with at least nine manufacturers in an effort to recruit solar plant investments. Unfortunately, projects have been lost to other states caused by a failure to recognize sound renewable energy investment policy.”
The problem with the existing Georgia clean energy incentive is that the Legislature set aside only $2.5 million a year in credits for all qualifying installations combined — too little to sustain growth of the solar industry alone. In addition, the legislation establishing the credit only authorized it for four years, through 2012, which means that all the money is spoken for by projects that were completed by the end of last year. As a result, GSEA claims, just the lost payroll taxes from solar installers that might have to layoff workers could rival the cost of the credit.
House Bill 146, which the solar association has been pushing, would restore the credit at a higher total cap — $10 million — although its also designed to be phased in over four years so that it doesn’t hit the state government’s budget so hard.
The problem is that the legislation is coming at very difficult time. Not only is the influential tax reform council pushing for cuts special tax breaks, but state lawmakers are dealing with a $1 billion-plus budget shortfall — caused at least in part by a tax base that’s been eroded for many years by so many breaks being given to influential business interests.
Solar advocates don’t see their industry as part of that trough-feeding culture. They view clean energy as a growth industry that needs to be nurtured. One example they bring up is a decision last year by Suniva Inc., a homegrown solar cell manufacturer to locate a new plant in Michigan — where laws are more favorable for the transition to clean energy.
As if to underscore the point, the Wall Street Journal’s “The Next Big Thing” project has now recognized Suniva for the second straight year as the second-most-promising venture-capital-funded, clean-technology company in the country.
“If Georgia’s poliitical leadership wants evidence that solar technology is a smart investment, they need look no further than our shining, homegrown example, Suniva, in whom the private market is putting so much faith,” GSEA Chairman Doug Beebe said in response. “Georgia has many more, equally promising solar companies that can help our economy thrive, and we think state dollars are wisely spent to encourage their efforts.”
