A bill that would allow people to receive tax credits if they install battery storage systems on their homes or businesses was temporarily tabled on Wednesday by the House Taxation and Revenue Committee, though it could be included in a larger tax package later depending in part on the budget.
The legislation—sponsored by Rep. Debra Sariñana, D-Albuquerque, Sen. Mimi Stewart, D-Albuquerque, and Rep. Tara Lujan, D-Santa Fe—previously passed the House Energy, Environment and Natural Resources Committee on a 6-4 party-line vote.
The tabling does not necessarily mean the bill is dead, as it often does in other committees. The House Taxation and Revenue Committee examines proposed tax credits and temporarily tables anything with a fiscal impact. Then, at the end of the session, the committee examines those proposed tax credits and creates a tax package based on what is in the budget.
“If we passed everything out of here, teachers are not going to get paid because money is going to tax credits instead of paying their salaries,” Rep. Jason Harper, R-Rio Rancho, said during the committee meeting.
He said every year about $1 billion in tax credits are proposed.
“When we table a bill, that doesn’t mean we don’t like it,” he said.
HB 32 proposes a tax credit of up to 40 percent of the cost of the equipment as well as installation costs for stationary energy storage systems installed on residential, commercial or agricultural properties. This tax credit would expire in 2028. The maximum tax credit would be $5,000 for residential properties or $150,000 for business or agricultural properties.
The energy storage system must also be tied to a new or existing solar photovoltaic system and must be able to store at least two hours worth of energy.
HB 32 is not the first time that legislators have sought to create a tax credit for energy storage systems. Legislators introduced similar legislation in the past three regular legislative sessions.
Proponents say that such legislation is needed to help transition to clean energy by making it easier for people to afford battery storage.
But some say that the tax credit would only benefit people who have money and not low-income households as the cost of energy storage remains out of reach.
Homeowners would still need to pay for the battery storage up front and later receive some reimbursement in the form of tax credits.
Lawmakers also expressed concerns about the tax credits being refundable. Refundable tax credits are rare in New Mexico and are usually done to help low-income people.
A refundable tax credit allows the taxpayer to receive the money even if the credit is larger than the amount of taxes they owe. For instance, if someone had to pay $1,000 in taxes and was eligible for a $5,000 refundable tax credit, they could receive a $4,000 refund. If the tax credit was non-refundable, it would just offset the $1,000 that the person owed.
The proposed state tax credits would also come about a year after federal legislation created a 30 percent tax credit for energy storage systems.
