Bill would cut tax credit for renewable energy for homeÂowners

Next step: Returns Monday to the committee.

Renewable energy

A proposed law woud bring back renewable energy tax credits for individuals but also would slash financial incentives for homeowners who want to install solar panels or tap geothermal resources.

That's because SB13 aims to support alternative energy and reinstate credits that lapsed Dec. 31 but not interfere with attempts to create a flat state income tax, said legislative bill sponsor Sen. Howard Stephenson, R-Draper.

The bill seeks to change the former 25 percent individual tax credit for alternative energy projects to a refund of the state's 6 percent sales tax. That would mean a homeowner installing a $10,000 solar system would get just $600 back instead of $2,000, the maximum credit the former law allowed.

The House Tax and Revenue Committee reviewed the bill Thursday but decided to have another look Monday after Stephenson has a chance to tweak his substitute bill before it heads to the full House.

After the hearing, Utah Clean Energy spokeswoman Sara Baldwin said SB13 would be "a real knock" to Utah's burgeoning solar industry, whose base customers are single-family homeowners and whose contractors used the individual tax credit as a sales tool.

Stephenson, however, said SB13 would bolster wind, biomass and geothermal energy development in homes and on farms by allowing a commercial tax credit on energy production as well as construction.

"Passage of this bill would go a long way in helping with our energy policy, and I believe it will also give incentives for establishment of significant alternative energy projects in southern Utah and in our rural areas that could in turn establish literally billions of dollars in taxable value for our school districts" and other tax entities, said Stephenson.

In October, Laura Nelson, energy policy adviser to Gov. Jon Huntsman Jr., recommended in her initial annual report that only the business credit be extended, citing Huntsman's advocacy of a "flatter" income tax as the reason.

SB13 would allow commercial tax credits of up to $50,000 per project, making geothermal heating more attractive, Stephenson said.