During a joint hearing by the Senate energy and governance & tax panels Oct. 19, witnesses praised the state’s tax exemption program for alternative energy manufacturing equipment. “It’s a bigger risk not having the tax exemption” said Bill Lockyer, State Treasurer. Sen. Bob Huff (R-Walnut) agreed, noting that private investors have a lot more funds at risk than the state. That is especially true because the renewable tax exemption is granted only after money is invested in renewable equipment. The Senate Energy, Utilities, & Communications and Governance and Tax Committees held the hearing to review the treasurer’s proposal to temporarily halt the tax exemption program in light of Solyndra’s bankruptcy. The collapse of the Fremont-based solar panel manufacturer has been scrutinized in and outside California, partly because the company was backed by a $535 million Department of Energy loan guarantee. “For every Solyndra, there are ten success stories,” noted Sen. Alex Padilla (D-Pacoima). The chair of the Senate energy panel added, however, “It’s a good time to look at how the year-old tax exemption program is doing.” The sales tax exemption for renewable manufacturing equipment was created by Padilla’s SB 71 to attract renewable firms to California. The legislation authorized the California Energy and Advanced Transportation Financing Authority in the Treasurer’s Office to grant the exemptions. Lockyer told lawmakers that the sales tax exemption at issue is “a model for the way tax expenditure laws should be written.” He and others highlighted its transparency, which distinguishes this program from the state’s other 86 tax break programs, which together create $43 billion in lost taxes, according to Lockyer. The treasurer and Legislative Analyst’s Office cautioned against reforming the renewable sales tax exemption program to include “claw backs,” that is, repayment of the exemption if the estimated number of manufacturing jobs fall below expectations. The job creation numbers are “guess work,” Lockyer pointed out. Two renewable equipment manufacturers testified in support of the program. Thin film manufacturer Solaria relocated to California from overseas partly because of the sales exemption on renewable equipment. “We probably wouldn’t have been able to locate in California without the renewables equipment tax exemption,” said Melissa Sucker, Solaria vice president. “California is absolutely where we want to be.” There have been about $104 million in sale tax exemptions for renewable equipment. That is based on $1.6 billion in purchases of components of solar panels and wind blades and other equipment. Solyndra received $25 million in tax exemptions (Current, Oct. 7, 2011).