MARRERO, La. -- Solar panel customers are suing the state for violating their constitutional rights when it imposed a cap on refundable solar tax credits in July 2015.
New Orleans lawyer Larry Centola filed the suit in Baton Rouge on Friday on behalf of five homeowners, claiming their property rights were violated when the refundable solar tax credits they thought were guaranteed to them, were transformed, retroactively, into a first-come-first-served free-for-all.
Centola’s lawsuit seeks class-action status to represent an estimated group of 2,000 homeowners, the number of taxpayers believed to have installed solar panels on their roofs before the Louisiana Legislature voted in June 2015 to phase out refundable tax credits over the next three years and cap them at a total of $25 million.
Those 2,000 homes had staked a claim to around $20 million in credits before the cap was even discussed by the Legislature, but nobody could actually apply for the credits until the following January.
The Legislature made no distinction between those who bought the panels before the law changed and those who bought them after the cap took effect July 1.
All that mattered was when the state received and processed the person’s tax return, meaning that people like Beverly Rogan, a Walmart associate from Harahan who installed her panels in March 2015, were given no priority over someone who installed their solar panels in December 2015.
Rogan applied for her tax credit right away in January. But the state Department of Revenue didn’t record her tax return as received until Feb. 5, and told Rogan she was too late to get the refund this year.
She thought she and her retired, live-in parents were going to be out more than $12,500 – the amount they had been promised in solar tax refunds when they bought their $25,000 solar panel system.
However, she got good news this week. She got a check in the mail from the state for $12,847 and was able to back-fill her parents’ life savings. They had used it last month to pay off a bridge loan they got to buy and install the solar panels – one that came due Aug. 11 and would have imposed $6,000 in interest if it hadn’t been paid in full.
“I was extremely blessed and thankful that I got it, but I also feel very upset for other people,” Rogan said.
The other people she’s talking about include those who are signing on to Centola’s lawsuit or are commiserating on the Facebook page called “I Got Screwed by the Louisiana Solar Tax Credits.” The Facebook group has been reaching out to legislators, asking them to fix the law.
But previous efforts to mend the problem have fallen flat. When WWL-TV confronted the sponsor of the cap, former Rep. Erich Ponti, R-Baton Rouge, he stood by it, saying it was crafted with the help of the solar installers to make sure it had enough money to cover everyone who had already signed up.
But again, the problem with the bill was not how much money it made available for paying the credits. Rather, it was the way it allowed new homeowners to participate in the program even after the cap was installed and how it gave them equal footing to seek the credits with those who had bought the panels before the cap existed.
With the program open to new installations for all of 2015, the state was slammed with another $20 million in claims after the law changed. That means $15 million in claimed credits will never be paid unless the law is changed.
One of those claims came from Jesse Mangum, an X-ray technician from Marrero. He got his panels in the fall of 2015, but his solar installer never told him the tax refund was no longer guaranteed, he said. And this weekend, he got a letter from the state saying he’s among the 1,500 claimants who will get nothing.
“I feel like I was lied to, cheated,” he said.
Centola said he’s preparing a second potential class-action lawsuit against some solar installation companies, which he said misrepresented the status of the tax credits after July 1, 2015, so they could keep their sales robust after the cap was imposed.
“I'm upset, I'm angry, and I've got to come out of pocket with all this money,” Mangum said. “It's a financial hardship for me, my family, for everyone.”