Committee considers substitute to allow PPAs and corporate claims under solar market tax credit; members raise consumer-protection and cost-allocation questions

Representatives Ferrari and Kates presented a committee substitute to House Bill 211 that keeps the existing $30 million annual cap for the solar market tax credit but alters eligibility to allow third-party power purchase agreements (PPAs) and corporate claimants so more households — including low-income or tax-exempt homeowners — can benefit.

The presenter said the substitute "adds an ability for low income people to better participate" by allowing PPAs so a third party can own the system, take federal tax credits and depreciation, and then sell electricity to a homeowner at a lower rate. As the presenter summarized, "When a third party PPA does the owns the system and then sells the electricity to the homeowner, they can get the federal tax credit, which is actually more than what the individual could get because they can get both a 30% base plus the 10% for energy communities." The amendment preserves the total $30 million budget and reintroduces a $20 million reference to 2023 for prior-year credits per tax department guidance.

Committee members pressed for consumer protections and clarity about who would actually fund and own systems. Members asked whether cooperative utilities or large firms would be the PPAs’ counterparty, whether corporations could claim a large share of the available credits, and how homeowner protections against liens and transfer complications would be enforced. Representative Henry described a recent real-estate example in which a seller remained responsible for a rooftop solar obligation; Representative Torres and others questioned whether PPAs create hidden liabilities for homeowners or affect resale and mortgage processes.

Contractual transferability, removal and decommissioning obligations were discussed. Witnesses and the presenter said PPA contracts commonly include transfer provisions (often with a modest fee) and end-of-term removal obligations; the presenter said large established PPA providers generally avoid placing liens on the house and instead secure their investment in the equipment. Committee members requested a standard residential PPA contract; the presenter said she would provide a residential PPA contract used by a school district for committee review.

Outcome: Committee discussion concluded with no final vote. The chair said the committee lacked the numbers to make a tabling motion that day and would continue consideration in a later meeting. The sponsor and supporters argued the change would enable broader participation without increasing the statutory cap; opponents and skeptical members sought stronger consumer protections and clearer projections on corporate uptake before committing the credit to new claimants.

Context: Supporters emphasized that many low-income households do not benefit from federal nonrefundable tax credits, so PPAs can transfer federal benefits to lower retail electric prices for households. Opponents cautioned that allowing corporate claimants and PPAs without safeguards could enable large third parties to capture credits and potentially leave homeowners exposed to financing or resale complications.