A property tax credit program designed to reward Montgomery County residents for using renewable energy-based heating and cooling systems has a $2.5 million backlog of payments owed to residents, according to Joe Beach, director of the county’s Department of Finance. On June 30, the end of fiscal 2011, 501 people were on a waiting list to receive tax credit payouts from the county. Some of them might have to wait as long as six years for a payment, Beach said, since the county hasn’t allocated enough money to pay before then. So far, 276 credits have been issued in the program’s three years of operation.
The program gives any homeowner who installs a solar, wind or geothermal energy device the opportunity to receive either half the cost of buying or installing the unit or a credit of $5,000 for a heating system or $1,500 for a hot water supply system, whatever costs the county less. According to Beach, most applicants qualify for the $5,000 credit, creating $2.5 million backlog.
“Meanwhile, new applications will be received, making the backlog even longer over the coming years,” Beach
wrote in a memo to County Council President Valerie Ervin, D-Silver Spring.
Though county officials said they regret not being able to pay residents, they also said it’s unlikely that they can change that anytime soon.
“We’re not sitting on lots of spare cash,” said County Councilman George Leventhal, D-at large. “It’s really unfortunate. This is a really good program.”
Enacted in 2008, the program has an annual cap of $400,000 for renewable energy devices. One way to reduce the waiting list is to raise the cap, said Beach, whether temporarily or long term. But raising the limit means the cash-strapped county has to find more funds for the program.
“I don’t know how realistic it is to increase the cap at this moment,” said Councilman Roger Berliner, D-Bethesda, who heads the council’s Transportation, Infrastructure, Energy & Environment Committee and originally proposed the tax-credit program. “I don’t know if any of us had a sense … as to how many people would take advantage of this.”
Other options include reducing the amount of the credits or ending the program entirely, Beach said.
Recognizing that some residents will be relying on the tax credit to offset the high price of a device like a solar panel, Beach said the Department of Finance has placed a notice on its website to warn residents of the delay.
Leventhal also expressed his regret.
“We’re really good at coming up with good ideas,” he said. “We’re not so good at finding the money to pay for them.”
