Date Requested:March 18, 2013
Time Requested:01:48 PM
Agency: State Tax & Revenue Department
CBD Number: Version: Bill Number: Resolution Number:
2013R2764 Introduced SB551
CBD Subject: SOLAR ENERGY TAX CREDIT
FUND(S)
General Revenue Fund
Sources of Revenue
General Fund
Legislation creates:
Neither Program nor Fund

Fiscal Note Summary

Effect this measure will have on costs and revenues of state government.

     The purpose of this bill is to apply the residential solar energy tax credit of up to $2,000 to each installation of a solar energy system. The bill extends the tax credit until July 1, 2021.
    
     According to our interpretation this bill would extend the current Residential Solar Energy Tax Credit until July 1, 2021. The credit is offered to any West Virginia resident who installs a solar energy system on property located in this state and owned by the taxpayer that is used as a residence after July 1, 2009. The credit is for the lesser of 30% or $2,000 of the costs to purchase and install the system. With the extension of the Federal Residential Renewable Energy Tax Credit that offers a credit of up to 30% of the costs of a solar system in addition to the state tax credit the total cost of the State tax credit will likely increase in the future. Under existing law, the estimated cost of extending the Residential Solar Energy Tax Credit for FY2014 is $150,000. While current law provides that the tax credit can be up to a maximum of $2,000 for the installation of a solar energy system, the bill’s proposal to allow the credit for “systems” and to allow a tax credit up to a maximum of $2,000 “for each installation” may result in tax credit claims for a single residence well in excess of the current $2,000 limit. The pre-incentive cost of a solar energy system for a typical home is more than $40,000.
    
     There would be no additional administrative costs associated with this bill to the State Tax Department.

Fiscal Note Detail
Over-all effect
Effect of Proposal Fiscal Year
2013
Increase/Decrease
(use"-")
2014
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 0 0 0
Personal Services 0 0 0
Current Expenses 0 0 0
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 0 0 0
2. Estimated Total Revenues 0 -150,000 -150,000
3. Explanation of above estimates (including long-range effect):
     The purpose of this bill is to apply the residential solar energy tax credit of up to $2,000 to each installation of a solar energy system. The bill extends the tax credit until July 1, 2021.
    
     According to our interpretation this bill would extend the current Residential Solar Energy Tax Credit until July 1, 2021. The credit is offered to any West Virginia resident who installs a solar energy system on property located in this state and owned by the taxpayer that is used as a residence after July 1, 2009. The credit is for the lesser of 30% or $2,000 of the costs to purchase and install the system. With the extension of the Federal Residential Renewable Energy Tax Credit that offers a credit of up to 30% of the costs of a solar system in addition to the state tax credit the total cost of the State tax credit will likely increase in the future. Under existing law, the estimated cost of extending the Residential Solar Energy Tax Credit for FY2014 is $150,000. While current law provides that the tax credit can be up to a maximum of $2,000 for the installation of a solar energy system, the bill’s proposal to allow the credit for “systems” and to allow a tax credit up to a maximum of $2,000 “for each installation” may result in tax credit claims for a single residence well in excess of the current $2,000 limit. The pre-incentive cost of a solar energy system for a typical home is more than $40,000.
    
     There would be no additional administrative costs associated with this bill to the State Tax Department.


Memorandum
Person submitting Fiscal Note:
Mark B. Muchow
Email Address:
Roger.D.Cox@wv
     The purpose of this bill is to apply the residential solar energy tax credit of up to $2,000 to each installation of a solar energy system. The bill extends the tax credit until July 1, 2021.
    
     The bill adds the phrase “for each installation” to the terms of the credit without defining what constitutes an installation. This could be interpreted in several ways leading to a potential increase in the amount of credit available for each residence.