NEW ORLEANS, LA (WVUE) - If you have plans to invest in a solar energy system, don't expect to receive a tax credit from the state of Louisiana. The FOX 8 Defenders have learned the amount of claims already paid and under review is more than what's available for the remaining life of the program, which ends next year.
On a hot July summer day, solar panels lining the roof of Crystal Viator's Belle Chasse home soak up the sun.
"I've seen big changes in my electric bill," she said.
Last summer, she invested in a solar panel system, new windows and new insulation.
"In the summertime I'd pay a $275 to $350 light bill, you know? Now, it's like $20," Viator said.
She's reaping the benefits of a more energy-efficient home, but says she took out loans to finance the $25,000 solar panel system, expecting that tax credits eventually would cover 80 percent of the cost. Until last summer, the state covered 50 percent of the amount. The federal government covered 30 percent, and still does.
Viator says she filed her state tax return, claiming the solar credits in February. Five months later, she said she has bills that are about to come due but hasn't received a penny from the state, and she worries what will happen when her loan matures this week.
"I really don't know what to do. Do I take out another loan to pay off this loan? I mean, do I file bankruptcy?" she asked.
The FOX 8 Defenders have learned she's not alone. Kevin Harvey got solar panels installed on his Ponchatoula home in May of 2015.
"They outline it for you and they tell you what you owe. They tell you what you're supposed to get back from federal, and they tell you what the state owes you, and that is a guarantee at the time I bought the system," Harvey said.
He explained his federal refund was deposited right away, but like Viator, he's received nothing from the state.
The FOX 8 Defenders have learned lawmakers made changes to the solar tax credit program a month after Harvey got his system. Act 131 became law on June 19, 2015. By July 1 of last year, the Louisiana Department of Revenue published a bulletin about it.
The new law established a credit cap, essentially the maximum amount of tax credits that may be granted in a fiscal year. For solar systems that were purchased, not leased, credits are required to be granted on a first-come, first-served basis, based on the date the tax return is filed - not on the installation date. That's an important distinction.
Crystal Viator and Kevin Harvey for example, whose solar systems were installed in 2015 before the new law created the credit caps, may or may not get refunds. When they filed their returns earlier this year in February, there was no way of knowing if they met the cap.
The state Department of Revenue tells FOX 8: "As of June 30, we had issued $9.38 million in solar energy system tax credit refunds out of the $10 million eligible for payment under the 2015-2016 fiscal year cap for purchased systems." LDR says the remaining refunds available under that cap will be issued this month. Taxpayers whose claims weren't eligible for payment under the current cap are being notified by letter this month whether they are eligible for deferred claims under the next fiscal year cap, according to a department spokesperson.
After the $10 million cap for this fiscal year and the next one, the amount of solar refunds granted by the state drops down to a $5 million cap before the program ends. LDR tells FOX 8 it's possible that some who've already installed solar systems before the law changed will not receive refunds.
"They should have done it in a more humane, considerate way by at least giving people notice before they went out and made such a big investment, because for most people, Shelley, $25,000 is a huge investment. That's a car, you know?" said Tulane Law professor Joel Friedman.
While he feels it's unfair, Friedman doesn't think it's unlawful.
"Unfortunately, this kind of application of the law is not unconstitutional, which would be really the only challenge you could make to a state statute. There's nothing in the State Constitution that would prevent it. Nothing in the United States Constitution that would prevent it," Friedman explained.
Crystal Viator and Kevin Harvey don't know one another, but both now face tremendous financial stress.
"I was assured the money would be there when the loans became due. More than one time I was assured that the money would be there when the loans came due," Viator said.
"They're taking money out of my pocket off of a promise that they made. Law is law, and if they choose to change it after and make it effective for the whole year, shame on them," Harvey said.
Although both families filed their solar claims very early, they're unsure whether they will be included in the tax credit cap. If they don't get refunds, they'll be left paying a lot more than half the cost of their solar systems. The loans that are about to mature come with substantially higher interest rates.
The FOX 8 Defenders staffed with volunteers from the National Council of Jewish Women also field consumer complaints at 1-877-670-6397 or you can fill out an online complaint form.