Pennsylvania Kills Alternative Energy Tax Credit On the Sly

Diane Mastrull writes this article in today's Philadelphia Inquirer regarding the alternative energy tax credits that were promised by the Commonwealth of Pennsylvania and Governor Ed Rendell to individual homeowners and small business for going "green".

Pa. quietly pulls back solar tax credit
For a state that says it's trying to encourage more alternative-energy use, this is not an especially proud development. Which may explain why Pennsylvania put out no news releases and held no news conferences about it.

In fact, physician Mark Lounsbury said it was his own phone call to the state Department of Revenue a few weeks back that led him to a disheartening discovery: The state tax credit approved for a $75,000 photovoltaic system he added to his Chadds Ford home would not be coming.

Not for him or for the 109 other applicants OKd for more than $4 million in Alternative Energy Production Tax Credits since Gov. Rendell announced their availability last July. The credit was to cover 15 percent of a project's total costs, after all other grants and subsidies were subtracted, and was not to exceed $1 million per taxpayer. Lounsbury's share would have been $4,200.

Turns out that the money for those tax credits - about $50 million over eight years from the state's general fund - was eliminated as part of the 101-day budget duel last fall. The move came as the recession choked revenue streams and interest groups fought back a Rendell proposal for a new funding source - taxing natural gas extracted from Pennsylvania's Marcellus Shale.

Federal tax credits and grants from the Pennsylvania Sunshine Program remain available to homeowners and small businesses for solar-system purchases, he stressed. Together, those can reduce the purchase price for a solar unit by nearly 60 percent.

"It was done in a way that is unfair to the people who were planning on it," said State Rep. Chris Ross (R., Chester).

Ross said he voted against the last state budget for a number of reasons, but he could not say with certainty whether he was aware at the time that it included the elimination of the alternative-energy tax credit.

And those Sunshine Program incentives? Adding insult to injury, Lounsbury said, he recently learned from his accountant that the state is going to tax as income the $22,000 in Sunshine funds he received to offset the price of his solar system.

Its not bad enough that the tax credits were taken away in the middle of the night and nobody was told about it. But to add insult to injury by taxing another incentive to go "green" is kinda ridiculous. Leave it up to the Democrats to pull another fast one.

To the legislature..now about those per diems you so desperately need???