Firms fear the end of tax credits

Feb 14 - Athens Banner-Herald, Ga.

An Athens company that produces solar water heaters depends on an expiring state tax credit for survival, executives say.

Power Partners Solar, a subsidiary of transformer manufacturer Power Partners Inc., sold and installed 17 solar-powered water heaters in homes and businesses last year, according to company officials.

If state clean-energy tax credits are quadrupled, as one Athens state lawmaker proposes, then the company's sales would also quadruple. But if the credits are allowed to expire at the end of the year, sales would fall off a cliff.

"Without an incentive, there would be very few systems installed in Georgia," said Scott Childs, Power Partners commercial operations manager.

That's because of the initial cost. A solar water heater installed while building a new house costs about $5,500, 10 times the price of an ordinary electric water heater. But the state offers a 35 percent tax credit up to $2,500 for homeowners -- more for costlier commercial installations -- and the federal government offers a 30 percent tax credit on top of it, bringing the cost down to about $2,000.

The devices save homeowners 20 percent to 40 percent on their electric bills, or an average of $50 a month for a family of four, according to the U.S. Department of Energy, so they can pay for themselves in less than four years.

Some utilities, such as Walton Electric Membership Corp. and Jackson EMC, also offer rebates for solar water heater owners, and the Georgia Power Co. is experimenting with similar rebates, said Deborah Purcell, Power Partners solar thermal sales engineer.

State Rep. Doug McKillip, R-Athens, introduced a bill Feb. 1 to extend the state clean energy tax credits until 2014 and expand them from $2.5 million to $10 million per year. The state is already out of money for 2011 even though more than four months are left in the fiscal year.

The alternative energy industry in Georgia has grown from one company to more than 40 since the legislature created the tax credit in 2007, generating hundreds of jobs, McKillip said.

"It's a fledgling industry, and one we need to support and encourage to come to Georgia," he said.

Besides solar panels, the credit also covers energy-efficient lights and building retrofits, geothermal heat pumps, wind turbines and renewable fuels made from wood scraps.

House Bill 146 is awaiting a hearing before a House Ways and Means subcommittee, McKillip said.

-----

To see more of The Athens Banner-Herald or to subscribe to the newspaper, go to http://www.onlineathens.com/.