FISCAL NOTE
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 stated purpose of this bill is to give credit for energy savings when a solar heating water system is installed on a residential property.
As written, this bill provides a state personal income tax credit of 30 percent of the cost to purchase and install a solar water heating system up to a maximum of $2,000. There would be minimal revenue consequences associated with the passage of this bill. According to the Energy Information Administration’s (EIA) Annual Energy Outlook 2007, the installed cost of a solar water heater was nearly $3,000 in 2004. Due to the overall cost and installation factors involved (e.g., solar resources, climate, local building code requirements, etc.), there would only be a limited number of taxpayers who could potentially take advantage of such a personal income tax credit.
Also, taxpayers may claim the federal Residential Solar and Fuel Cell Tax Credit. The Energy Policy Act of 2005 established a 30 percent credit up to $2,000 for the purchase and installation of residential solar electric and water heating systems. The credit is available through December 31, 2008.
There would be no additional administrative costs to the State Tax Department from the passage of this bill.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2008
Increase/Decrease
(use"-") |
2009
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 |
0 |
0 |
Explanation of above estimates (including long-range effect):
The stated purpose of this bill is to give credit for energy savings when a solar heating water system is installed on a residential property.
As written, this bill provides a state personal income tax credit of 30 percent of the cost to purchase and install a solar water heating system up to a maximum of $2,000. There would be minimal revenue consequences associated with the passage of this bill. According to the Energy Information Administration’s (EIA) Annual Energy Outlook 2007, the installed cost of a solar water heater was nearly $3,000 in 2004. Due to the overall cost and installation factors involved (e.g., solar resources, climate, local building code requirements, etc.), there would only be a limited number of taxpayers who could potentially take advantage of such a personal income tax credit.
Also, taxpayers may claim the federal Residential Solar and Fuel Cell Tax Credit. The Energy Policy Act of 2005 established a 30 percent credit up to $2,000 for the purchase and installation of residential solar electric and water heating systems. The credit is available through December 31, 2008.
There would be no additional administrative costs to the State Tax Department from the passage of this bill.
Memorandum
The stated purpose of this bill is to give credit for energy savings when a solar heating water system is installed on a residential property.
This bill enacts a new article, West Virginia Code §11-25-1 et seq. However, Article 25 is currently in use and titled Tax Relief for Elderly Homeowners and Renters. Since the current Article 25 is not being repealed, there is some question as to what effect this bill would have if enacted.
Also, the bill requires the solar heating system to derive at least 50 percent of its energy to heat water from the sun. However, the bill does not provide a methodology or test to determine the amount of energy savings.
Person submitting Fiscal Note: Mark Muchow
Email Address: kpetry@tax.state.wv.us