I read with interest your story in the Dec. 6 issue on solar subsidies. A couple of questions immediately come to mind, the first being whether the timing of the story was intended to influence the Skrmetta/Wright election held on that day, and secondly several substantive points. Your story seems to accurately define the cost of solar subsidies, but it does little to quantify the benefits to the taxpayers of Louisiana.

In any business decision, a cost/benefit analysis is critical to making a sound, informed decision. What are the benefits the state has received by offering solar tax credits? The questions that immediately come to my mind (and some economist has probably already quantified) are:

  • How many new direct jobs were created in Louisiana, and what are the additional taxes generated by this employment (income taxes, sales taxes, property taxes, etc.)?
  • How many indirect jobs were created and what are the benefits from those?
  • How much do solar companies pay in state taxes of all sorts?
  • What are the cumulative savings generated from solar systems in Louisiana, and how are those funds redeployed? If the savings are spent on retail sales, this obviously generates additional tax revenue.
  • How many fossil fuel plants have not been built due to the installed solar, and what are the avoided rate increase to cover the costs of those plants to the public at large? The fact that Louisiana is a large fossil fuel producer is irrelevant to solar in that the displaced fossil fuel consumption is negligible.

I would recommend that the state re-visit the economics of all of its tax credits and then re-deploy credits to the sectors where the state receives the highest return on investment. Is that solar? I don’t know because I don’t have sufficient facts to make an informed decision, but I do not believe The Advocate’s quantifying the state’s expenses in terms of tax credits does justice to any analysis unless it also quantifies the benefits.

I would suspect continued solar incentives would make sense to the state of Louisiana, but perhaps with a lower percentage rebate or a fixed rebate per kW installed. What would the impact be if the current 50 percent tax credit were left in place but limited to solar systems manufactured in Louisiana? Would this be enough of an incentive to have a manufacturing facility located here with those associated jobs and what benefits might the state receive than?

Important decisions such as this should be based on real facts on both cost and benefits. I am sure these facts are there waiting to be uncovered, and hopefully disclosed to those interested in the subject.

Charles Williams

attorney

New Orleans