Comments on Income Tax Credits for Solar Energy Systems (LAC: 61:I.1907) from Louisiana Solar Energy Society Comment #1 Comment #2 Comment #3 AS STATED NOW Photovoltaic Panel - a panel consisting of a collection of solar cells capable of producing direct current (DC) electrical energy when exposed to sunlight. PROPOSED CHANGES Photovoltaic Panel - a panel consisting of a collection of solar cells capable of producing direct current (DC) or Alternating current (AC) electrical energy when exposed to sunlight. REASON Photovoltaic panels now are manufactured in AC and DC versions. B. Definitions Residence a single family detached dwelling. To be considered a residence, the physical properties of the space must provide the basic elements of a home, including appropriate and customary appliances and facilities and the occupant must use the facilities as a home. All eligible residences must be located in Louisiana. B. Definitions Residence a single family dwelling. To be considered a residence, the physical properties of the space must provide the basic elements of a home, including appropriate and customary appliances and facilities and the occupant must use the facilities as a home. All eligible residences must be located in Louisiana. (REMOVE THE WORD DETACHED ) Current wording takes away rights of the owner of the residence that happens to be attached to another single family residence. The current law RS 47:6030 does not include the word detached and allows the credit for specifically: a single-family residence located in Louisiana D. Claiming the Solar Energy Systems Tax Credit
Comment #4 2. System components purchased on or after July 1, 2013 for all solar electric or solar thermal energy systems must be compliant with the federal American Recovery and Reinvestment Act of 2009. This requirement applies to all credit-eligible components as described below in Subsection E. Components which are manufactured or produced in the United States or in a country with which the United States is a party to an international agreement meeting the criteria of ARRA will generally be regarded as ARRA compliant. For additional information, see Revenue Information Bulletin 13-013. D. Claiming the Solar Energy Systems Tax Credit 2. Major system components (Inverter, racking, and solar modules) purchased on or after July 1, 2013 for all solar electric or solar thermal energy systems must be compliant with the federal American Recovery and Reinvestment Act of 2009. This requirement applies to all credit-eligible components as described below in Subsection E. Major components (Inverter, racking, and solar modules) that are manufactured or produced in the United States or in a country with which the United States is a party to an international agreement meeting the criteria of ARRA will generally be regarded as ARRA compliant. For additional information, see Revenue Information Bulletin 13-013. Without listing which components must be ARRA compliant it will be nearly impossible to track the country of origin for all minor components for installers and impossible to provide paperwork proof to LDR for every minor component. For example, U.S. inverter manufacturer may supply circuit breakers from Lesotho to be used with their equipment. Installers should not have to determine where Lesotho is, if it is an ARRA compliant country, get proof of that, provide that proof to LDR, and watch that the box of circuit breakers does not include parts from another country: The same goes for all other minor balance of system components that are purchased per job from suppliers. E. Components that are manufactured or produced in the United States or in a country that the United States is a party to an international agreement meeting the criteria or ARRA will be generally regarded as ARRA compliant. For additional information, see RIB 13-013.
Comment #5 E. Major components (Inverter, racking and solar modules) purchased after July 1, 2013 that are manufactured or produced in the United States shall be compliant with the requirements of ARRA. No Residential installation will exceed $7,804,000. Per Office of Management and Budget: 2 CFR Part 176 Requirements for Implementing Section 1502,1605 and 1601 of the American Recovery and Re-Investment Act of 2009. 2CFR 176.90 (a) The last part of the paragraph is no being applied by LDR which states: As of January 1, 2010, this obligation to International Trade Agreements shall only apply to projects with an estimated value of $7,804,000 or more and projects that are not specifically excluded from the application of those agreements. It was the intent of the legislature to require "BUY AMERICAN MADE PRODUCTS." AS STATED NOW: Solar energy systems not installed on the rooftop of the residence but installed on the qualifying property shall constitute a freestanding ground mounted system. Ground mounted solar energy systems include but are not limited to single pole-mounted structures, multiple pole mounted structures utilizing a foundation if necessary. Additional walls, interior finishes, foundations, roofing structures not directly related to the solar energy system, or any other addition not directly related to the solar energy structure are not eligible system costs. Ground mounted systems must be more than 8 feet in height at its lowest point if titled unless specific building codes and/or flood plain restrictions apply. Each qualifying freestanding ground mounted system must be separately itemized from any and all other energy components included in a taxpayer s submitted Form R- 1086. Solar energy systems not installed on the rooftop of the residence but installed on the qualifying property shall constitute a freestanding ground mounted system. Ground mounted solar energy systems include but are not limited to single pole-mounted structures, multiple pole mounted structures utilizing a foundation if necessary. Additional walls, interior finishes, foundations, roofing structures not directly related to the solar energy system, or any other addition not directly related to the solar energy structure are not eligible system costs. Each qualifying free standing ground mounted system must be separately itemized from any and all other energy components included
Comment #6 Comment #7 in a taxpayer s submitted Form R- 1086. The statement, Ground mounted systems must be more than 8 feet in height at its lowest point if titled unless specific building codes and/or flood plain restrictions apply, should be eliminated because installing 8 ground mounts is impractical and not a normal practice for solar installers. AS STATED NOW: 11. f. name and Louisiana contractor s license number of seller/ installer; PROPOSED CHANGE: 11. f. name and Louisiana contractor s license number of seller and installer; The word and should be included due to the fact that some parties are acting as contractors without a license. Ref La. R.S. 37:2150-2192 (2150.1 (4)(a) F. Eligible Costs 1. Eligible Costs. Eligible costs that can be included under the tax credit are reasonable and prudent costs for equipment and installation of the solar energy systems defined in Subsection B and described in Subsection E above. a. All eligible solar energy systems must be sold and installed by a contractor duly licensed by and in good standing with the Louisiana Contractors Licensing Board with a classification of Solar Energy Equipment and a certificate of training in the design and installation of solar energy systems from an industry recognized training entity or a Louisiana technical college. F. Eligible Costs 1. Eligible Costs. Eligible costs that can be included under the tax credit are reasonable and prudent costs for equipment and installation of the solar energy systems defined in Subsection B and described in Subsection E above. a. All eligible solar energy systems must be sold and installed by a contractor duly licensed by and in good standing with the Louisiana Contractors Licensing Board with a classification of Solar Energy Equipment and a certificate of training in the design and installation of solar energy systems from an industry recognized training entity or a Louisiana technical college, or the owner of the residence.
Current wording takes away two rights of the owner of the residence. 1. The ability for the owner of the residence to self install a solar system while following applicable rules and permitting. 2. The ability to competitively shop and purchase for ARRA compliant solar equipment from any vendor. The new law requires that you only buy from Louisiana Contractors which seems to be a restraint of trade and violation of interstate commerce. Comment #8 Comment #9 AS STATED NOW: F. 4. Only one solar energy systems tax credit is available for each residence. In addition, in the event of purchase and installation by a thirdparty taxpayer through a lease with the owner of the residence, only one solar energy systems tax credit is available for each eligible system. Once a solar energy systems tax credit is claimed by a taxpayer for a particular residence or system, that same residence or system is not eligible for any other tax credit pursuant to this Section. If the residential property or system is sold, the taxpayer who claimed the tax credit must disclose his use of the tax credit to the purchaser. PROPOSED CHANGES 4. Only one solar energy systems tax credit is available for each residence, tax payer, third party or developer including leased systems. In addition, in the event of purchase and installation by a third-party taxpayer through a lease with the owner of the residence, only one solar energy systems tax credit is available for a system. Once a solar energy systems tax credit is claimed by a taxpayer for a particular residence or system, that same residence or system is not eligible for any other tax credit pursuant to this Section. If the residential property or system is sold, the taxpayer who claimed the tax credit must disclose his use of the tax credit to the purchaser. If homeowners can only claim one tax credit, a leaser, third party, tax payer, or developer should only be able to claim one tax credit, also. The original tax credit was intended for the taxpaying home owners. G. Other Tax Benefits Disallowed 1. A taxpayer shall not receive any other state tax credit, exemption, exclusion, deduction, or any other tax benefit for solar property for which the taxpayer has received a solar electric energy system or solar thermal energy system credit under R.S. 47:6030.
2. Exception. The credit may be used in addition to any federal tax credits earned for the same system. G. Other Tax Benefits Disallowed 1. A taxpayer shall not receive any other state tax credit, exemption, exclusion, deduction, or any other tax benefit for solar property for which the taxpayer has received a solar electric energy system or solar thermal energy system credit under R.S. 47:6030. 2. Exception. a. The credit may be used in addition to any federal tax credits earned for the same system. b. Solar property shall be exempt from ad valorem taxation and not added to assessed value of the building the solar property is attached (RS 47:1706) Current wording could be interpreted to disallow the RS 47:1706 statue since it technically is a other tax benefit that is allowed for solar property