Clean-energy tax credits
Georgia taxpayers have already claimed $25 million in clean energy tax credits, an appropriation that was to last through 2014. Here’s a year-by-year look at who has applied and for how much. Under state law, the names of those who received the credit are secret.
2008: 114 residential applications. Total credits requested: $1.82 million; Total approved: 102 applications for $389,691
63 nonresidential applications. Total credits requested: $1.44 million; Total approved: 45 applications for $1.35 million
Largest request: $10,500 from several homeowners for solar heating projects. Largest nonresidential request: $255,808 by Cox Enterprises for solar power. A spokeswoman for Cox Enterprises, the parent company of The Atlanta Journal-Constitution, confirmed the company received a credit but declined to say for how much.
2009: 220 residential applications. Total credits requested: $854,260.68; Total approved: 143 applications for $683,329
81 nonresidential applications. Total credits requested: $2.03 million; Total approved: 23 applications for $1.82 million
Largest request: $10,500 by several homeowners for solar heating projects. Largest nonresidential request: $141,000 for solar power at a doctor’s office. Efforts to reach office officials were unsuccessful.
2010: 170 residential applications. Total credits requested: $894,421; Total approved: 86 applications for $543,818.
94 nonresidential applications. Total credits requested: $7 million; Total approved: 23 applications for $1.96 million
Largest request: Belk Department Stores requested a $2.35 million credit for an energy-efficient building in Newnan. Efforts to reach Belk officials were unsuccessful. The largest residential credit requested was for $46,453 for a home’s geothermal heat pump on Argonne Drive in Fulton County.
2011: 297 residential applications. Total credits requested: $2.03 million; Total approved: 49 applications for $219,226.
107 nonresidential applications. Total credits requested: $7.81 million; Total approved: 21 applications for $2.28 million.
Largest residential request: $49,705 for solar and thermal electric improvements at a home in Athens. Largest nonresidential request: $623,821 for solar and thermal electric improvements at JM Family Enterprises in Alpharetta. Efforts to reach officials at JM Family Enterprises were unsuccessful.
2012: 292 residential applications. Total credits requested: $3.16 million; Total approved: 230 applications for $962,387.
126 nonresidential applications. Total credits requested: $12.02 million; Total approved: 74 applications for $4.04 million.
Largest residential request: $852,000 for a geothermal heat pump at a home on West Paces Ferry Road in Buckhead. Largest nonresidential request: $4.69 million by Greenway Medical Technologies in Carrollton for an energy-efficient building. A spokesman for Greenway confirmed the company received a $100,000 credit.
Sources: Georgia Environmental Finance Authority, Georgia Department of Revenue
Georgia’s tax credit program for clean-energy improvements has proved wildly popular, so much so that the credits created in 2008 exhausted their funding two years short of the program’s 2014 sunset.
The tax credits — which could cover a percentage of energy-efficient improvements from geothermal heat pumps, solar water tanks and lighting improvements in businesses — have sent $25 million back to taxpayers who qualified.
While those numbers would seem to show the program is a success, questions remain: Are the credits effective? Is it enough money? And who exactly is getting them?
Under state law, the names of those who received the credits are secret because that is considered private taxpayer information. But the Georgia Environmental Finance Authority provided The Atlanta Journal-Constitution a year-by-year list of those who applied.
From the launch of the program in mid-2008 through 2012, more than 1,000 individuals have applied for credits worth more than $7.32 million, compared with 471 business requests for more than $30 million in credits. Of those applicants, the tax breaks went to 55.8 percent of the residential requests and 39.4 percent of the nonresidential requests. The credits were to be awarded on a first-come, first-served basis. Over the first four years, GEFA says qualifying energy improvements generated more than $78 million in investment and $10.5 million in sales taxes.
That’s a lot of water heaters.
But it’s not enough, said Trey Jarrard, the chief executive officer of Renewvia. Jarrard’s company designs and installs commercial and utility solar systems. Georgia’s tax credits, he said, are a crucial component in making large systems affordable.
The state’s decision to cap the credits at $5 million per year and $500,000 per project is understandable, Jarrard said, unless you compare them with other industry credit programs.
“We understand having caps on things so they don’t get out of control,” he said. “The disparity comes into play when its compared to the movie credits, where there’s no budget cap and no project cap.
“There’s probably some line somewhere that needs to be met.”
With the money for the credits already spoken for through 2014, clean-energy advocates are expected to pressure lawmakers next year to increase funding and to extend the funding past 2014. The Southern Alliance for Clean Energy will be among those urging legislators to add more money and time to the credit program.
“Incentives like these are really effective in helping drive additional use of renewable resources,” said Anne Blair, the clean fuels director and Georgia state affairs liaison for the alliance. “The interest is overwhelming and we do need more money. There is going to be great interest in getting more money for the program and possibly expanding it in the future. That’s what Georgia needs to do.”
Lawmakers are willing to consider it, said Senate Finance Committee Chairman Judson Hill, R-Marietta. The tax credit was given a 2014 “sunset,” something Hill said is good policy. Hill’s committee has jurisdiction over most tax bills.
“It allows the Legislature the opportunity to consider the impact of credits and whether we should renew them or modify them, expand them or eliminate them,” Hill said. “I’d welcome that discussion.”
Lawmakers will have more than four years of data to measure the program’s success.
“We need to be careful as we continue to assess credits, but the sunset model is a fiscally responsible way to approach special incentives and credits so we actually consider them with more accurate information,” Hill said.
Blair, from the clean-energy alliance, said Georgia has much room to improve in creating renewable energy. U.S. Department of Energy data show Georgia ranks 19th in renewable energy production, with almost all of it coming from biomass and hydroelectric power. The state’s solar production barely registers.
That could change with additional funding for the tax credits. But, because of secrecy laws, the public has no way of knowing exactly who receives them. And that’s not good, said Nick Kasprak, an analyst with the conservative-leaning Tax Foundation in Washington.
The foundation, he said, has no “problem with government spending that attempts to encourage people to use clean energy.”
“That’s a noble goal,” Kasprak said. “But it shouldn’t be done through the tax code as a tax credit. It has all kinds of transparency issues.”
Tax secrecy laws are “there for a reason,” Kasprak said. “But in this particular case you run into transparency problems” when the public has no way of vetting who received the benefits.
In New York, for example, Gov. Andrew Cuomo has come under fire for taking huge campaign contributions from companies that then directly benefited from a similar program he signed into law days later. While there’s no evidence of something similar happening in Georgia, the secrecy of the program makes it impossible to know.
Lynn Everitt of Braselton wants to become as “green” as possible. Everitt said she is working to make her home in Gwinnett County as energy-efficient as possible. When she learned about the state’s energy tax credit program, she quickly applied, only to find out the credits were gone.
“Who is benefiting from this?” Everitt said. “You can’t find out who got it. We can’t be picking and choosing our friends in a secret way.”
Everitt, even without the credits, is still trying to go green at home. She already has a solar-powered hot water heater and hopes to install enough solar panels “to get off the grid.”
Said Everitt, “I’m not going to give up.”
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