We need to renew the Idaho renewables tax incentive
March 3, 2011Renewable energy in Idaho has a long history, beginning with dams more than 100 years ago and continuing today with high-tech wind turbines, solar panels and agricultural digesters. However, as this well-reported story by Ben Botkin in the Twin Falls Times News points out, an important tax break for the industry is set to expire in a few months.
Since 2005, Idaho has had a rebate program that exempts renewable energy projects from paying the state’s 6 percent sales tax, but it’s set to expire June 30. The tax was intended to give Idaho’s nascent renewable industry a push forward and has become central to the economics of renewable energy. The story quotes several wind industry representatives who warn that currently-slated projects may become economically unfeasible without the incentive.
I represent Exergy Development Group, a Northwest energy company with significant investment in renewable energy. Exergy has a 183-megawatt project in the Magic Valley and is planning to bring more wind energy to south-central Idaho. Without these tax incentives the projects would not be built, robbing Idaho of millions of dollars. The story correctly points out that losing the rebate would reduce our competitive edge, effectively adding 6 percent to the cost of doing business for renewable developers.
It’s understandable that lawmakers are concerned about the state budget, which is facing a historic deficit due to the depressed economy. Under the rebate program, the state has given up $13.3 million, which includes wind, geothermal and biomass projects. On the other hand, according to the Idaho Tax Commission, the rebate program is essentially revenue neutral – the taxable value of jobs, goods and services spurred by developing the projects about equals the amount the state spends. Of course, there’s the benefit of putting Idahoans to work, royalty payments to ranchers, emissions-free power and the future revenue that will come from power sales.
No lawmaker has yet introduced a bill to extend the rebate, although they are examining it. Myself and thousands of people who work in, and benefit from, the renewable energy industry are hoping the rebate program is extended.
