Newsletter: Residential Solar Property Tax Exemption Bills Pass House

This solar newsletter was originally published on June 15, 2018.

Residential Solar Property Tax Exemption Bills Pass House

On Tuesday, June 13, two bills to clarify the tax status of distributed generation (DG) projects passed the Michigan House of Representatives. The bills, HB 5143 and HB 5680, were introduced by Representative Tom Barrett. HB 5143 would reinstate a tax exemption for “alternative energy personal property,” including solar PV, fuel cell, wind, combined heat and power, and storage systems which offset the host’s energy use.  HB 5680 would add alternative energy systems to the list of repairs and household upgrades that are not considered when determining the true cash value of a property for assessment purposes, until the property is sold.

Michigan EIBC has been actively supportive of these bills.The legislation is necessary to avoid the current confusion and patchwork system of interpretation and enforcement around taxation of distributed energy systems. Michigan EIBC president Liesl Eichler Clark explained that the taxes on residential solar panels are currently assessed inconsistently across the state. “In some cases they get panels up and then get a bill in the mail and installers had no idea assessors are assessing [residential solar installations] in that community,” she said.

Even more confusing, perhaps, is the logic behind the tax in the first place: “You don’t tax my generator,” Clark explained, so “why tax my solar panels?”


Solar Tariffs Upset Solar Installation Plans

Developers say Trump administration tariffs on imported solar panels have caused developers across the U.S. to freeze or cancel $2.5 billion in large solar installations. This represents more than double the amount expected to be invested in new domestic solar manufacturing as a result of the tariffs. Among the developers affected are Michigan EIBC member companies Cypress Creek Renewables, Inovateus Solar and Southern Current.

Cypress Creek Renewables spokesman Jeff McKay said the utility-scale developer has been forced to cancel or freeze $1.5 billion in projects because the tariff raised costs to uncompetitive levels. Similarly, Southern Current’s vice president of development and strategy Bret Sowers said the company is facing a similar problem with $1 billion of projects.

“Either you make the decision to default or you bite the bullet and you make less money,” Sowers said.

The tariff has forced Inovateus Solar to shift its attention away from its home in the Midwest to places where state incentives make it more profitable, chairman T.J. Kanczuzewski said.

At the same time, the tariffs have helped to double domestic solar manufacturing by incentivizing foreign solar manufacturers to manufacture their panels in the United States. For example, JinkoSolar from China has announced plans to spend $50 million on projects to increase panel construction in the United States. Similarly, Hanwha Q CELLS from Korea announced plans to open a factory in Georgia next year.


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Events to Watch:

The Michigan Energy Office will host an Electric Vehicle Forum, including an EV ride-and-drive and panel discussions, on Wednesday, June 20, from 8 a.m. to 1 p.m, at Michigan Agency for Energy (7109 W. Saginaw Highway), in Lansing. The event agenda can be found here.

The Solar Energy Industries Association (SEIA) and Smart Electric Power Alliance (SEPA) invite you to Solar Power International, September 24-27, in Anaheim, California. Registration opens in spring of 2018 here.