Seeing green

Baton Rouge Business Report

By David Jacobs

September 8, 2009 - In what advocates call a win for good energy policy, job creation and the environment, the Legislature passed three bills in the latest session supporters hope will create “green” jobs in Louisiana.

“We are thrilled by the vision these legislators have shown,” says Karen Wimpelberg, who directs regulatory affairs for the Alliance for Affordable Energy.

About a dozen bills related to renewable energy and green jobs were proposed in the recent session, says Alliance spokesman Christian Roselund, which he attributes to President Barack Obama raising the profile of energy efficiency issues. Some of those bills were near duplicates of each other; in the end, three potentially significant bills passed fairly easily. None of the three bills has any immediate impact on the cash-strapped state budget.

House Bill 733 creates a tax credit for employers who create green jobs, including jobs in energy efficiency, environmentally friendly deconstruction of buildings and renewable energy production. The bill depends, however, on federal money that might never arrive. The tax credits originally would have been funded by the state, but its author, Rep. Walt Leger III, a New Orleans Democrat, made a last-minute change to ensure passage.

“It was not a good session for new tax credits,” Roselund says. Funds from the federal stimulus bill cannot be used for state tax credits, he says.

House Bill 858 by Rep. Erich Ponti, a Baton Rouge Republican, tweaks the 50% tax credit for installation of solar equipment, allowing third-party owners to claim the credit. Roselund says developers looking for ways to defray the upfront cost of solar technology supported the change, although he says the interest has come primarily from small niche developers.

Perhaps most intriguing is Senate Bill 224 by Sen. Nick Gautreaux, an Abbeville Democrat, which allows municipalities to create finance zones and issue bonds for energy efficiency and renewable energy projects. The bill is based on a pilot program in Berkeley, Calif., that primarily is about putting solar panels on homes. The Louisiana program could apply to solar, wind or energy efficiency retrofits on homes or commercial buildings.

In Berkeley, there are more than 40 bonds, one for each project, an Alliance researcher says. That city is looking for a less cumbersome process, and it is unclear how the funding model would look here. People can repay the bonds over 20 years on their property taxes, although with Louisiana’s low property tax rate that method might not work here.

Despite the uncertainty, Wade Byrd, president of Performance Building Consulting, calls SB 224 a “fantastic” bill. Byrd has been named to the six-person commission that will study the concept in East Baton Rouge Parish.

“This legislation [SB 224] is probably the most forward-thinking piece of public policy the state has implemented in my lifetime,” says Troy Von Otnott, founder and president of South Coast Solar in New Orleans. “I think Louisiana is on the vanguard of renewable energy public policy in the United States.”

South Coast Solar employs 21 people, is on target to be a $5 million company this year, and expects to double in size next year, Von Otnott says, adding the company is “definitely going to be expanding into Baton Rouge.”

But he says most of his customers are economic elites, and he admits that market will be exhausted at some point. A bond program could be “the great equalizer,” allowing schools, nonprofits and small businesses to install energy- and money-saving technologies by agreeing to a special assessment.

Byrd, who is on the board of the Louisiana CleanTech Network and previously worked on energy issues for the state Department of Natural Resources, is less impressed by the recent session despite his support for SB 224.

“At least we didn’t go backwards,” he says.

Byrd is far more excited by an energy efficiency/renewable energy program DNR has put together to spend $71 million in federal stimulus money. The U.S. Department of Energy approved spending the first half of that money on July 20.

“It’s a fantastic program, one of the best in the country, I think, and it has the potential to create a whole new industry in Louisiana,” he says.

Louisiana already has incentive programs for homes built to certain efficiency standards. The new program is the only one in the country [as far as Byrd knows] for commercial buildings. A mom-and-pop grocery store, for example, would be eligible for 25% of the cost of the improvements or 25% of the energy savings, capped at $5,000.

“I’m real excited about that because I think it has the potential to make them more competitive [by reducing energy costs], maybe even keep some people in business that wouldn’t be in business otherwise,” he says. “If you’ve got a small store and you don’t take advantage of this program, shame on you.”

A small army of auditors is needed for the program, which is why CleanTech has held training sessions around the state. Byrd says Louisiana now has the best tax credit program for residences—and perhaps the only incentive program for commercial buildings.

“I don’t know why we don’t get more credit,” he says. “I don’t know why we don’t pat ourselves on the back.”

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