July, 2016 - Brian Fontenot, Author

July 28, 2016July 29, 2016

Update on My Louisiana #SolarNightmare and Resources

This is an update on my personal solar tax credit situation, my #SolarNightmare. On Monday (7/25), I checked the LDR website to see if the status of my refund had changed. For many, many weeks now it had remained in a state of perpetual processing, but on Monday it was different. The site informed me that my return amount had been adjusted and I should receive payment by the end of the week.

I took this as confirmation the State had finally and officially informed me that it was preparing to bone me. Just to see if at least my income taxes would be refunded, I checked my bank account on Tuesday and found the entire solar credit waiting for me. I’ve yet to receive any other official correspondence.

I don’t know why or how. I personally know someone who filed their taxes within an hour of filing mine and used the same solar installer to do it, but this person’s credit was deferred. This person also submitted the tax forms online via the LDR site, whereas I tried and failed to submit mine through TurboTax and had to fax the whole thing in a couple of days later.

***Edit (7/28/16@8:10): I checked my emails from last January. I actually filed on Jan. 20 at 6:02 a.m. and was accepted at 10:10 a.m. the same day. This means I filed a day later than the person I mentioned above and got my credit while that person did not. Same solar installer. Same forms. I failed to submit properly with TurboTax and had to fax in my return. This person submitted the forms electronically on the State’s website.***

Something really fishy is going on with how these credits are being doled out. I’m just saying…

Regardless, I’m in the clear as far as my financial burden goes. I paid off the bill immediately. If it doesn’t close itself automatically, I’m going to call and have the creditor close the account.

Some people have described what happened to me as a blessing, but I disagree. I was lucky. Other people won’t be. What the State did was wrong. Almost everyone who comes to understand the situation will agree, so we can’t let the State get away with this. The best way to fight it is to make know what it did. Expose it by talking about, telling others about, and forcing the local media, especially the Baton Rouge media, to do it’s job.

Below are links to three stories/videos from local media that actually get into retroactive aspect of the law and what it means for unfortunate homeowners. Most other media outfits just recycle that incomplete AP story.

The first one is the Times Picayune story. It only mentions the law being retroactive at like the 10th paragraph down, but it has 53 comments now. It needs MORE.

Louisiana has no more tax credits for solar owners

***Edit (7/29/16@5:15 p.m.): Bill sponsor defends solar credit cap that has upset homeowners

FOX 8 Defenders: Changes to LA’s solar energy tax credit program causes financial stress

Homeowners having to pay thousands of dollars after solar tax credits cap reached

There is also now a Facebook group set up specifically for this issue. I suggest joining it.

I Got Screwed by the Louisiana Solar Tax Credits

One of the big solar installers, Joule, sent out an email to its customers with some helpful advice and suggestions as to what can be done to survive the sudden acquisition of a $12,500 of debt. Keep in mind this email is intended for Joule’s customers only, but it contains a lot of useful contact information.

I also want to remind people that the Federal Government is supposed to pick up 30% of the cost of your system. So, depending on how you choose to manage the debt, it may be wise to apply that Federal money to the debt, first. I am no financial adviser, however. This is just a mere observation.

SOLAR TAX CREDITS

Per the recent announcement from the Louisiana Department of Revenue (LDR), which can be read here, the state has received $39 million worth of solar tax credit claims. The total solar tax credit funding available is $25 million. For folks like you who had their systems installed in 2015, your tax credit eligibility and the timing of any tax credit disbursement is based on the date you correctly filed your solar tax credit claim and it was received by the LDR. Any solar panel systems installed this year (2016) or later will not be eligible to receive a tax credit from the state.

Joule has made repeated efforts to have the current solar legislation changed in favor of our clients. We have met with dozens of legislators and spent tens of thousands of dollars on professional lobbyists in an attempt to improve the situation on our clients’ behalf, but the state has ignored those requests and has chosen to retain the current structure.

If you would like to make your opinion on this matter heard at the state level, please reach out via the following link and phone number:

– Find and Contact Your Legislator: https://www.legis.la.gov/legis/FindMyLegislators.aspx

– Call the Governor’s Constituent Help Line: 225-342-0991

YOUR STATE TAX RETURN

Several of our clients have already notified us that they have been issued their solar tax credit. Over this week and next, all other filers should be receiving a notification in the mail as to whether their solar tax credit claim has been approved, deferred until a future year, or denied.

The state will not give us any details relating to any specific resident’s personal tax return. If you have any questions about your solar tax credit and/or you are looking for a status update, your best approach would be to directly contact the Louisiana Department of Revenue via the contact information below:

Louisiana Department of Revenue, Baton Rouge Headquarters
Post Office Box 201
Baton Rouge, LA 70821-0201
617 North Third Street
Baton Rouge, LA 70802
Phone: 855-307-3893 (follow the automated prompts)
http://www.rev.state.la.us/Contact

FINANCING

If you chose to use GreenSky financing to pay for your solar panel system, we believe that it is likely that your financing promotional period will expire in the near future. As we understand it, when this promotional period ends, you will be charged a high interest rate (17% or higher) and will begin owing monthly payments on your loan.

Not knowing your personal financial situation, we at Joule cannot advise you about what action, if any at all, you should take with respect to your GreenSky financing when the promotional period ends. However, we have some information that you may find helpful in making the decisions with respect to this financing that are right for you.

First, we want to provide you contact information for GreenSky in case you have any questions or need additional information about your GreenSky loan. GreenSky’s customer service number is (866) 936-0602, and its website is http://www.greenskycredit.com. Any inquiries or information requests you have about your loan should be directed to GreenSky.

We also want to make you aware of a New Orleans-based financing entity, ASI Federal Credit Union, that has offered to receive and review loan applications for solar customers affected by the state’s solar tax credit program. You can reach ASI by phone at (504) 733-7274, option 3, or on its website at www.asifcu.org. We understand that, if you decide that refinancing your GreenSky loan is the right choice, ASI will work with you to determine what financing terms, if any, are available to you.

Joule is providing you information about ASI solely to help you explore your options – we will not receive any kind of benefit if you elect to refinance your loan with ASI. Any decision to work with this or any other financing company or apply for any of their financing products is entirely your decision and responsibility. Joule does not endorse, nor is affiliated with, ASI nor any specific financing company or their products.

There are also many other avenues that you may wish to explore to help you figure out the best option regarding your GreenSky loan for your financial situation. The internet can be a great resource for locating useful information about available financing options. One website focused on personal finance that you could review is www.nerdwallet.com, but there are many others like it that can provide helpful information.

Please note that Joule is not a financial advisory firm. Other than encouraging you to review your options with respect to your GreenSky loan before the promotional period ends, we cannot give you any advice on payment plans, refinancing requests, loan deferments or otherwise how you should handle your GreenSky loan. Further, we do not recommend any particular option or company over another. Finally, please note that Joule has no ability to control or otherwise influence the decisions that GreenSky, ASI or any other financial institution or other entity may make with respect to your GreenSky loan or the refinancing of such loan.

If you have any questions about this topic, or about the ongoing operation of your solar panel system, feel free to reach out to our customer support team via email (support@joule-energy.com) or phone (504-586-0625 option 3)
Best,

The Team at Joule Solar Energy

I hope this helps someone. I’ve been on a tirade on Twitter lately over the issue, using the #SolarNightmare hashtag. I suggest those of you fighting to have this law fixed also take to Twitter and use it to spread the word. Send a tweet to @LouisianaGov about your situation.

July 22, 2016July 28, 2016

The Louisiana #SolarNightmare – How an Ex Post Facto Law May Lead to Bankruptcy

I intended for this site to be a place to promote my books and to share fun stuff I do from time to time, as well as what little writing wisdom I have. But I need to talk about my experience with having solar panels installed on my home and how that’s turned into a nightmare.

I have two “patches” of panels installed on the southern side of my house so they can get as much sunlight as possible. Below is a capture of the Facebook post I made back in April of 2015 after having the panels installed. If you’re able to read the quote, the local power company came out to inspect the system and to officially turn it on before mid-May. The system costs $21,000.00, plus another $100 or so for the net meter.

Before we go further, there are some things you need to understand about solar panels.

They in no way actually help the environment. Their efficiency is at best %20. They’re production and disposal creates toxic waste. Each year they generate power, they lose efficiency. Over 20 years, my system is expected to have its electricity production halved.

When power goes out, which it often does, the solar system disconnects from the electrical grid as a safety measure for any of the power company workers trying to repair the system. So, when the power goes out, even if it’s bright and sunny outside (which happens), I still lose power. The only way to get around this is to purchase and install an expensive battery system that wears out and dies usually in about 4 years.

Solar panels are also far too expensive to be practical. So much so, without substantial tax credits you’re basically wasting thousands of dollars.

Over the last 12 months, my system generated the following amount of power (kWh) and “dollars saved.”

Even if my system were to stay at its brand new electricity generation level indefinitely, it would take about 30 years for the system to pay for itself at current energy prices. More than likely though, the panels would never be able to pay for themselves as their generation continues to degrade to nothing.

So, you may be wondering why, if I knew all of this, did I got a solar system installed on my home.

There were three reasons.

First, Louisiana, where I live, has had a very generous tax credit (%50 of the cost up to $25,000) to help homeowners purchase solar systems. Coupled with the still ongoing %30 Federal tax credit for said systems, you could get a $25,000 system installed at %20 of the total cost (or basically for free with financing). And if you look at my generation numbers and consider %20 of 21,000 is $4,200, it would only take 6-8 years for my system to pay for itself. Not only that, but the solar installer I used made a contractual guarantee to make up the difference of expected versus actual power generation in the first year, which ended up netting me another $200.

Second, I had been interested in taking advantage of the solar credits for a while, because they were supposed to go away in 2017 if not earlier. What kept me from pulling the trigger was I needed a new roof first. And I got one installed in late February of 2015. So, the timing seemed great.

Third, I naively considered that having a $21,000 system installed on my house for power generation would increase my home’s value by some percentage of the cost of the system. At the time, I was very close to escaping having to waste money every month on mortgage insurance or PMI. I figured I could get the system basically for free, have it installed, get my home reappraised, and then save on the additional cost of PMI every month.

With all of these things in mind, I signed the contract and was thrilled to have my system installed. It was so neat to keep peaking at the website that reports the power generation or to go look at the actual meter. And I paid for it through an 18 month, no interest, no payments plan for the %80 of the cost (17% deferred interest) I was going to get back in tax credits when I filed in January 2016.

And it turns out I was wrong. Critically wrong.

The appraiser couldn’t determine what, if any, value the system added to my home because no homes with systems had been sold in the area to make a comparison. It was still too new. So, any hope I had of escaping PMI early died.

And as some many have heard, the State of Louisiana fell on some hard fiscal times. Our state has never been good about managing money and spends it all when it has it. So July of 2015 comes and the legislature is having its come-to-Jesus moment about the budget. They start cutting tax credits and raising taxes. Which is fine, you have to do what you have to do.

But they decided to change the solar tax credit law. They decided to cap it. They had already spent close to $150 million on the credits and now they needed that money. Again, this is fine. Times are tough, so turn off the spicket.

But they went and did something horrible and potentially unconstitutionally. They made the cap to the tax credit RETROACTIVE.

To be as clear as possible: In April of 2015, I financed $16,800 for 18 months because I was going to get a Federal tax credit and a State tax credit to pay for this amount in early 2016. In July of 2015, the legislature added a $10 million cap for 2015 for the credit. The credit, if you read the law linked above, is paid out on a first-come, first-served basis. So, in July of 2015 I found myself placed in a race to file my taxes.

I filed my income taxes on the first day of filing in 2016 with Turbo Tax (lots of problems, tech support). January 19, I believe. And this was in spite of trying to amend my return after my house being robbed three days later on the 21st or so. Still, I got it done. I ended up having to fax my solar credit form in on the 22nd.

See, the State was criminally late in setting up its electronic system for receiving the packet of paperwork required to claim the tax credit. It still accepted my income tax filing on the 19, but I had to fax the paperwork into the Louisiana Department of Revenue a few days later (no email? seriously?) and got confirmation of receipt of the materials in mid-February of 2016. Sometime in late March or early April, I got a letter from LDR requesting that I send in an invoice for the system, so I did.

Note, this request for additional paperwork, even paperwork that had already been included in the initial packet was not an uncommon occurrence. I know of two other people who had the same experience.

It’s not July 22, 2016 and I haven’t gotten my state income tax back. And this is what the credit situation looks like.

While I received my Federal tax credit of $6,300, it’s increasingly looking like I’m going to get left holding the bag for $10,500. And this is money that needs to be paid off in some form before the 18 months runs out or I could also find myself responsible for thousands of dollars more in deferred interest.

A friend of a friend got this letter in the mail from LDR today. I added the black bar to protect personal information.

I haven’t gotten my letter, yet. I still may not. But I know I’m not alone. There are a lot of people like me that took advantage of what the State had been encouraging us to do for years and then left us holding the check. We agreed to play the game and the State changed the rules on us after we made our move. Had there been a cap in place in April of 2015, I’d never have taken the risk, because I’m not a moron.

I’ve tried contacting my local representatives and senators about my plight. I’ve emailed the local media, but they’re just starting to wake up to the issue and are still missing the point. They’re falling back on the same lazy angle of the strident solar energy industry bracing for the loss of business instead of speaking up for the people being hurt by incompetent governance.

This could lead to a pretty embarrassing and expensive class action suit against the state. But in the near term, all I can do is wait to see what happens with my credit, spread the news about the people that have been burned (because the media isn’t), and plan for what to do if I suddenly need to come up with the equivalent of a new down payment on a house.

#SolarNightmare