A mix of Republican and Democratic lawmakers are pushing again to reinstate a solar tax credit that they say is crucial to making renewable energy more affordable to New Mexicans.
The House Labor and Economic Development Committee voted 8-4 Monday to advance the bill, as proponents said it would grow New Mexico’s solar industry, create jobs and lower energy bills.
Opponents of the measure, House Bill 61, countered that it unfairly allows government to favor certain businesses or energy sectors over others. They also argued that the tax credit would largely benefit higher-income households that can already afford the investment, and would siphon the state’s sparse funds from priorities such as education.
“This is the sort of tax credit that benefits middle- and upper-income” households, said Rep. Rebecca Dow, R-Truth or Consequences.
The average solar installation costs $19,000, and an analysis by the Legislative Finance Committee found that the average annual taxable income for an applicant seeking the solar tax credit was $170,000.
A legislative analysis says the bill could create 250 new solar installations and 60 jobs each year, at an average cost to the state of $83,000 per job.
The bill also failed to meet targets for proving it was the most cost-effective path, as this would depend on pending rate increases by the state’s largest utility company, Public Service Company of New Mexico, the committee’s review found.
Rep. Rick Little, R-Chaparral, said government shouldn’t be choosing which businesses get an incentive.
“If the market is good for it, it will go,” he said.
But members of the public, largely environmental groups and lobbyists for both the solar and oil and gas industries, voiced support for the bill.
Since the tax credit was first introduced in 2008, the price of solar has declined by 50 percent, widely increasing the residents who can invest in it, supporters of the bill said.
Regina Wheeler, CEO of Sunpower by Positive Energy Solar, said that indicates the incentive worked exactly as it was designed to. Extending the credit now, she said, will keep the industry strong.
The bill would allow users to receive 10 percent tax returns for installation costs before 2019. Refunds would decline by 1 percentage point each year through 2024, before the credit expires.
The bill’s sponsor, Rep. Sarah Maestas Barnes, R-Albuquerque, said she sees the rebate “as a huge investment in New Mexico.”
The credit would complement a more lucrative federal incentive, which provides a 30 percent tax credit through 2022.
In addition to the proposal by Maestas Barnes, three other bills introduced this year by state lawmakers would either extend the tax credit or make it permanent.
Legislators in 2015 approved an extension of the solar tax credit, but Republican Gov. Susana Martinez vetoed it. Other bills last year to revive the credit died in the House of Representatives and the Senate amid a budget crisis.
Contact Rebecca Moss at (505) 986-3011 or [email protected].