Solar advocates urge extension of tax credit
SANTA FE — A solar tax credit that many see as a key to New Mexico job growth and the state's goals to curb carbon emissions is set to expire at the end of the year if a bill to extend the credit doesn't pass in the coming weeks.
A similar extension was approved with bipartisan support in both houses of the Legislature last year but was pocket-vetoed by Gov. Susana Martinez.
Advocates Monday were quick to note that Martinez called for "the increased development of every kind of energy we can produce" during her State of the State address last week.
House Bill 26 would allocate $5 million annually for residents who install solar thermal or photovoltaic systems at their home or business. They would receive a tax rebate of 10 percent of the cost of installation — up to $9,000 — until 2019. The proposed rebate will then decrease 1 percent each year until 2024.
The current tax credit has been in effect since 2006, and over the last five years an average of $38 million has been spent installing solar panels. In 2014, 1,600 people were employed in solar jobs, according to the Legislative Finance Committee. And the number of solar installations has grown an average of 81 percent between 2010-13, the bill's sponsors say.
On Monday, the bill took its first steps toward passage with a 7-4 vote in the House Energy, Environment and Natural Resources Committee.
"This bill is a no-brainer," said Rep. Jeff Steinborn, D-Las Cruces. "It's good for economy, good for consumers, good for the environment."
About 50 people gathered for the hearing and 10 representatives from environmental groups gave statements of support, including the Sierra Club, the League of Women Voters and the New Mexico Home Builders Association. No member of the public expressed opposition.
"I see this bill as critical in terms of maintaining this key area of employment here in the state," said Rep. Sarah Maestas Barnes, R-Albuquerque, who is sponsoring the bill along with Sen. Mimi Stewart, D-Albuquerque.
However, Rep. Larry Scott, R-Hobbs, called the bill "Robin Hood in reverse."
"This is increasing the costs to those less affluent and redistributing it to those more affluent," he said.
Scott raised concerns that those who chose not to install solar, or who can't afford to, would bear the burden of paying for rising utility costs skirted by solar neighbors. He compared it to driving a neighbor's car without paying for gas or maintenance.
Following the vote, he said he was disappointed the bill had passed. Without a system that charges solar owners for their use of the power grid, he said, he will not support the bill.
His sentiments were echoed by Rep. James Townsend, R-Artesia, who called it "a rich man's bill."
However, advocates of the bill said the key demographic utilizing the credits were middle-class people earning between $40,000 and $90,000 annually.
"I appreciate that you're feeling 'the Bern,' I didn't realize you were a supporter," Rep. Steinborn said to Townsend, referencing the policies of Democratic presidential candidate Bernie Sanders.
Committee Democrats said it was essential to place the bill within the framework of public health and climate impact, and the larger scope of energy company incentives.
"(In) the much larger context of the cost of our lives and the cost of air, you pay a little more now so you don't have acid rain down the line," said Committee Majority Leader Rep. Brian Egolf, D-Santa Fe, who said solar deserved to be given the same opportunities for growth as the oil and gas industry, which receives substantial government credits.
"This bill won't die," said Rep. James R.J. Strickler, R-Farmington, despite voting no. He said the federal solar tax credit of 30 percent, which was recently extended to Dec. 31, 2019, would keep the "free market" for solar thriving and makes the state's extension redundant.
But Regina Wheeler, CEO of Positive Energy Solar, said New Mexico needs both credits.
"(Solar) is still an emerging industry," said Wheeler. "You don't want New Mexico to ... falter in job creation in this industry. ... You don't want to decrease that momentum at all."