More than 750 Iowa homeowners will lose an average of $ 3,200 after government banned solar energy systems tax credit.
The homeowners qualified for the loan when they bought their systems, many of them in 2020, and had legally applied for the tax breaks, said Tyler Olson, a former Democratic state official who runs a company that primarily sells commercial solar energy systems.
“I would be mad if I were on this list” said Olson. “You met the criteria to qualify for this loan. Then the legislature decided in retrospect to withdraw the loan. “
Olson is a board member of the Iowa Solar Energy Trade Association and president of SiteGen Solar in Cedar Rapids.
The credits officially expire at the end of the year. The state has already spent all of its money on housing projects. Companies are still eligible for credit, said Lewis Butler, president of the trade association.
Republican majority leaders in the legislature have debated over the past few years reviewing a number of tax credits, some of which have been around for years, to see if they are still warranted. Solar energy advocates said GOP senators told them the home loans would be removed because of the industry “tires” and doesn't need them.
Senator Dan Dawson, R-Council Bluffs, said the end of tax credits was part of the broader review. “Iowa's tax credits and exemptions have created a patchwork of tax breaks for certain Iowers, preventing major tax reform for all of Iowa.” said Dawson.
“As we work towards comprehensive tax reform and tax relief for all Iower, we must carefully review the existing tax credits and exemptions that are currently on the books that stand in the way of this reform.” Dawson added.
On May 18, Rep. Charles Isenhart, D-Dubuque, attempted to amend a draft budget to provide money for the backlog of loan applications and to expand the program. The change failed.
During the floor debate, Rep. Dustin Hite, R-New Sharon said: “Representative. Isenhart, I know that many of us support your concept. Unfortunately, that was something we just couldn't agree on on the other side. “ in the Senate.
Polk County Supervisor Matt McCoy, a former Democratic lawmaker, installed a $ 38,000 solar panel in his home south of Grand in Des Moines and is one of those who lost credit.
“Many of the people (on the waiting list) were farmers”, said McCoy. “I didn't think the legislature would bite the farmers.”
McCoy said the loan extension appeared to be dying in the Senate. “I think there's a philosophy up there that all special tax credits are a bad thing.” he added.
The end of the credit is unfortunate as people willing to cut fossil fuel consumption and greenhouse gas emissions should be rewarded, McCoy said.
The change means McCoy will have to add several years to his predictions that his solar power system would pay for itself in 11 years. The panels cover all the electricity needs of his house.
Solar a Nationwide Selling Proposition
Iowa is a national leader in renewable energy, especially wind. The solar industry is growing rapidly.
A trading group is listing the 900 solar-related jobs in Iowa in 2019 versus 350 in 2015. At least 85 companies are here in the solar energy supply chain.
Executives, including senior executives, state lawmakers, and local elected officials, regularly brag about the state's track record in renewable energy and its relatively inexpensive electricity, a selling point in business recruitment.
Josh Mandelbaum, a Des Moines councilor and senior attorney for the Environmental Law & Policy Center, said the tax credit had died in the legislature just ended despite bipartisan support, at least in the House of Representatives.
“It was a big disappointment in a session full of disappointments”, he added. “We made it clear that the state solar tax credit has fueled a lot of investment in communities across the state, especially in smaller communities and rural areas.” where pig farms and other businesses started adding them.
Mandelbaum said if lawmakers let the loan die, they could at least have appropriated funds to cover the waiting list of people applying for the loan. Hopefully the legislature will look at this and see that this is not good from just business practice and certainly from the point of view of the people who trust the state, and we will go back and correct this piece in the next legislature. “ he added.
Since the applications far exceeded the state spending limit for the loans, a long waiting list formed for the aid.
The state had set a limit of $ 5 million a year on loans. Lawyers had asked lawmakers to double that amount to $ 10 million in the coming years. Instead, the legislature is allowing the program to expire.
Andrew Fisher of 1 Source Solar in Ankeny said the waiting list had grown to 2,000 before this year's money was spent. There were 760 homeowners waiting for a loan when the state ran out of money this year, based on records from the Iowa Department of the Treasury, Fisher said.
The homeowners who were denied credit combined would have spent $ 27 million on projects, Fisher added.
Michael Schmidt, attorney for the nonprofit Iowa Environment Council, said those who recently purchased modules will wait longer for their energy savings to cover the cost of their personal solar project.
“That makes a big difference to your return on investment” said Schmidt. “It takes a while to compensate for this with savings on electricity bills.”
Government loans typically offset up to 13% of project costs, with a limit of $ 5,000 for residential projects and $ 20,000 for commercial projects. The federal tax credits cover 26% of the project costs.
The state offered 36.6 million between 2012 and 2020
Several bills were tabled over the past year to extend the tax credit and, in some cases, separate it from federal tax breaks. They died in committees as lawmakers turned to other matters in an overtime session of delicate negotiating budgetary issues, Olson said.
A question of decision?
Loan restoration would allow homeowners and businesses to determine their own energy destinies rather than relying solely on investor-owned utilities, for example, he added.
“By not extending the tax credit, lawmakers are really swinging the balance back to monopoly utilities and away from homeowners and small businesses who have the ability to generate their own electricity and take control of their energy price.” said Olson.
Fisher, vice president of the Iowa Solar Energy Trade Association, said: “We will definitely try to get something done next year.”
Legislature ends solar tax credits, leaving 760 Iowans off the money
Latest news and more in your inbox