Louisiana’s solar industry is at a critical turning point. During the past few weeks, Louisiana legislators, Public Service Commission Chairman Eric Skrmetta and electric utilities are trying to renege on deals to support Louisiana’s solar industry. The utilities, and their allies in government, want to eliminate tax credits to support fast-growing solar markets.
Regulatory and legislative efforts to break the Louisiana solar tax credit promise are shortsighted as a matter of policy, foolish as a matter of economic development, and weak as a matter of character. If these attacks are successful, they will deny Louisianans the freedom of energy choice and our rights to a free, open and competitive market.
In 2008, Louisiana began one of the most successful tax credit programs in the United States. Unlike perpetual tax credits for some industries, Louisiana’s solar tax credits have worked to launch a new, self-sufficient solar industry — with a self-regulated end date for the credits. The solar industry offered an early retirement in 2017 to the program because of its success. While other energy industries continue to rely on decades of special favors — with no end in sight — solar has made good on its promises. The industry only needs public officials to do the same.
My own experiences in Louisiana, as an Army officer stationed at Fort Polk and a resident of DeRidder, and later as a Texas Public Utility Commissioner with regulatory oversight of utilities that operated in both Texas and Louisiana, convinced me of the potential benefits of solar-generated electricity for the state. The long-distance power system in Louisiana, with its heavy dependence on central station utility power plants — while more profitable for monopoly utilities — remains vulnerable to economic and physical disruption.
As an Entergy customer living in Texas when Hurricane Ike swept over our community, I saw firsthand the value that locally generated electricity could have in disaster recovery. When the sun came out shortly after the storm, instead of making electricity with it so that businesses could reopen, we waited powerlessly for our turn for electrical service restoration.
I, like so many people who now have jobs in the solar industry, and the thousands of customers at all levels of economic positions, have been thrilled to see how well the targeted and sustained tax credit program has worked.
Solar energy has been and continues to be a good investment for Louisiana. Solar is labor-intensive, creating high-quality, highly skilled jobs at a rate eight times faster than other energy sources. In Louisiana alone this amounts to over 1,200 direct and 2,400 indirect jobs already.
Solar energy is an unlimited resource and not susceptible to market fluctuations. Just 40 minutes of sunshine on the Earth is equivalent to the annual global demand for electricity. Innovations in storage technology and continuous improvements in solar manufacturing promise even more cost reductions — if the market continues to grow. As a successful first-mover in solar in the Southeast, Louisiana is poised to reap the rewards of market leadership — but Louisiana must keep its promises.
Solar business leaders have delivered on their promises with results and integrity — keeping their word to bring jobs and value. That’s why it is so disappointing to see efforts by LPSC Commissioner Skrmetta, utilities and some legislative members to kill this critical industry.
The unprecedented attacks on solar in Louisiana have already become national energy news. With a recent, deeply flawed study commissioned and promoted by Public Service Commissioner Skrmetta through a suspect procurement process, the extent to which the solar attack is not a debate on the merits of the issue is clearer than ever.
Other states have hosted solar policy debates, and when those debates have occurred in honest and open processes, solar energy policies are usually strengthened. Solar energy works, and Louisiana’s legislature should honor its deal and protect our state’s solar workers and freedom of energy choice.
Karl R. Rábago is the executive director of the Pace Energy and Climate Center at the Pace University School of Law in White Plains, New York.