Sen. Majority Whip Mimi Stewart’s bill to reinstate a solar tax credit passed its first committee Monday with a vote of 8-2. Stewart, D-Albuquerque, presented SB 29 to the Senate’s Corporations and Transportation Committee.
“I hate to count how many times the committee’s actually heard [this bill],” Stewart joked with the committee. By our count, it’s the fifth time the bill has been introduced since the state solar tax credit expired in 2016.
Stewart, who has been working on the bill with Gov. Michelle Lujan Grisham, said the two of them agreed that “this needed to be a bill that incentivized folks to use solar.”
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The legislation would create an income tax credit worth 10 percent of the cost of installation for solar thermal or solar photovoltaic systems for residential, business or agriculture applications.
The bill caps tax credits at $6,000 per person — down from the $9,000 that the initial tax credit offered — and sets a $10 million limit total per calendar year. The legislation would require individuals or businesses to apply for the tax credit in the tax year during which the system was purchased, and it specifies that only certified solar thermal or photovoltaic systems qualify. It also directs the state Energy, Minerals and Natural Resources Department (EMNRD) to develop rules for certifying solar systems for tax credit eligibility. The tax credit would expire in 10 years.
Stewart said 7,700 residences took advantage of the tax credit between 2008 and 2016. The tax credit expired after then-Gov. Susana Martinez pocket vetoed an extension in 2015. She pocket vetoed another solar tax credit proposal in 2018.
“Although the cost of solar has gone down incredibly, it’s still expensive,” Stewart said. “From the data we have, people who [install solar] have incomes of $30,000 to $90,000 per year. It ranges from lower income to the upper income.”
Stewart also stressed that the tax credit would help bring more jobs to the state.
“When we lost our credit in 2016, we saw a 25 percent decrease in solar jobs in this state,” Stewart said, adding that solar companies left the state as a result of the tax credit ending.
“This tax credit really is a job producer,” she said.
Sen. Pat Woods, R-Broadview, voiced concerns about the bill. He acknowledged that rooftop solar is good for the consumer, but said it might pose problems for smaller electric utilities in balancing power generation when the solar panels aren’t generating power. Woods sits on the board of the Farmers Electric Cooperative servicing Curry, DeBaca, Guadalupe, Harding, Quay, Roosevelt and San Miguel counties.
“It’s really a great thing for a consumer to not pay an electric bill. They make a huge investment. The bad part of that is, it’s damn hard to figure out how much generation you need if you keep getting a lot of rooftop solar,” Woods said. He pointed to situations of inclement weather where rooftop solar may not perform reliably.
“I’m sure that the grid is capable in a large area to take care of that,” he said. “But the smaller the grid size, the more it complicates the [power] generation. It’s a hell of a balancing act to do. And I can see why a utility, especially a small utility, would have problems.”
He also expressed doubts that the tax credit would help the state’s poorest.
The bill ultimately passed the committee, with Woods and Sen. William Sharer, R-Farmington, voting against it.
The committee also passed SB 6, sponsored by Sens. Steve Neville, R-Aztec, and Jacob Candelaria, D-Albuquerque. That bill would enable counties to issue industrial revenue bonds (IRBs) for funding transmission line projects across the state. The bill passed the committee with no opposition.
Both bills will head to the Senate Finance Committee next.
