Solar Panel Tax Credit: You're Not My Sunshine

Sep 15, 2016

A group of Louisiana homeowners is suing the state Department of Revenue over denial of solar tax credits.

Dawn Naquin of Theriot, Louisiana says she is "one of the people who bought solar panels with the intentions that I would be getting back a solar tax credit.”

Credit Wikimedia Commons

“We bought before the law changed,” she explained to members of the Task Force on Structural Changes in Budget and Policy on Wednesday.

In 2015, the Legislature capped the total the state would pay on solar panel purchases. 

Task force member and Louisiana AFL-CIO President Louis Reine asked, "when the Legislature reduced the tax credits for solar, that wasn’t for future purchases? That went back to people who had purchased previous to the date?”

Department of Revenue Secretary Kimberly Robinson said not exactly.

“The cap is $10 million for Fiscal Year 15-16, $10 million for Fiscal Year 16-17 and $5 million for Fiscal Year 17-18," she explained.

Here’s the problem: the fiscal year starts July 1. But you file your taxes by the calendar year. That six month difference created the problem.

“That cap is recognized based upon the date the return claiming the credit is filed. Because it is an individual income tax credit," explained Robinson, "those returns are filed in the calendar year after the year in which your system is installed. For some homeowners that install solar panels prior to July 1, 2015, they could not claim their credit until January of 2016 when those returns could be filed.”

Now the state has reached the cap for all three fiscal years and the Department of Revenue has been sending out denial letters.

But just like the recommendations this task force will make on budget policy, says Reine, solar panel tax credits ultimately depend on the Legislature.