Bribery scandal, budget woes sink Oregon solar incentive

The Oregon solar industry, led by the Oregon Solar Energy Industries Association (OSEIA), asked its members for one more frantic push to urge legislators to replace the old residential solar tax credit with a new one before the legislative session ends today. But that effort has failed – the result of a burgeoning budget deficit and, at least in part, because of a bribery scandal that ensnared one state Department of Energy (ODOE) official.

As a result, no solar incentive is in the budget that will be voted on by both houses of the legislature, though OSEIA and legislators are already talking about proposing a successor program when the legislature reconvenes in February 2018.

Under the Residential Energy Tax Credit (RETC), Oregon residents could save up to $6,000 for solar installations. When the program came under intense scrutiny following news that a Oregon Department of Energy official had taken nearly $300,000 in bribes to steer the sale of business renewable energy tax credits to private brokers (that had nothing to do with the RETC), OSEIA threw a Hail Mary.

OSEIA rapidly developed and proposed the Residential Incentive for Solar Energy (RISE), which would have started at $6,000 through 2019 and slowly being lowered by $1,000 each year until 2023. But faced with a state budget deficit, a bribery scandal and only three weeks left in the session, the legislature ultimately decided to let the RETC expire on Dec. 31 with nothing to replace it.

While Jeff Bissonnette, executive director of OSEIA, was unable to respond in time for publication, J. Rachel Shimshak, executive director of Renewable Northwest, said she thinks solar will be at the top of the legislature’s agenda next year.

“It is a difficult budget year here in Oregon as it is in other states,” Shimshak said. “But the effort to educate legislators about the benefits of the solar incentive were immensely productive.”

“The residential solar incentive is an important part of the solar market in Oregon,” Shimshak said. “There may be a temporary lull, but I am optimistic that the gap in incentive coverage won’t last long. Oregonians care about their quality of life, and solar is becoming a central feature of that quality.”

OSEIA had made passing a six-year extension of the RETC a major legislative focus in 2017, and all seemed to be moving along smoothly. As recently as June 8, OSEIA told its members that a hearing on the extension had gone extremely well and that an extension looked likely.

Then Joe Colello happened, and all hell broke loose.

Somewhere between June 8 and June 16 (pv magazine has been unable to determine the exact date), former ODOE official Joseph John Colello was indicted on charges that he took nearly $300,000 in bribes to steer state’s business renewable-energy tax-credit sales to private brokers instead of having state employees broker the deals as was the preferred practice. While the charges didn’t involve the RETC, it was likely killed by shrapnel from the rapidly exploding scandal.

At that point, Gov. Kate Brown withdrew her support of a RETC extension, citing questions about how tax incentives had been handled by the Department of Energy (ODOE). OSEIA informed its members on June 16 that it had entered into discussions with legislators about moving the program – and all other incentives – out of the ODOE and into Business Oregon, another state agency. It wrote:

“While ODOE is expected to continue to exist, the general consensus is to move all incentive programs out of the agency and put them in other agencies to give ODOE time to rebuild. That work group is ongoing and we should know more next week as to what a tax credit extension looks like and where it might live.”

Then Colello plead guilty to charges of racketeering, tax evasion and bribe receiving on June 21, and the next day, OSEIA proposed RISE.

For the full details of the scandal, we suggest you read Ted Sickinger’s superb reporting in The Oregonian, including the breaking news last week that an 78-count indictment has been handed down on the private contractor allegedly tied to the scandal.