Published in Energy

Whitmer expected to sign bills that clarify solar energy tax exemptions

BY Sunday, November 03, 2019 12:22pm

Gov. Gretchen Whitmer supports a package of bills recently approved by the state Legislature that clarifies tax exemptions for small-scale solar energy projects.

Whitmer’s support comes after similar legislation was vetoed late last year by former Gov. Rick Snyder, who raised technical concerns over the bills despite broad support among lawmakers.

That support carried over to the current legislative session. The House had near unanimous support for the bills in June, while the Senate unanimously signed off this week.

House Bills 4465 and 4069, along with Senate Bill 47, generally provide tax exemptions for small-scale, “behind-the-meter” solar projects. 

“We are supportive,” the governor’s office said in a brief statement to MiBiz Thursday.

From 2003 to 2013, solar panels were exempt from property taxes. After the provision expired, local assessors as well as state agencies gave conflicting guidance on whether panels should be taxed as real property. The confusion has grown in recent years as the cost of solar energy has decreased and more residents and businesses invest in providing their own power.

The patchwork approach to taxation created uncertainty over how long it would take to pay off the upfront investment for utility customers.

“These new laws will fix the confusing patchwork of taxation across the state when it comes to rooftop solar so more Michigan families and businesses can take advantage of the cost-saving potential of generating their own renewable energy,” Laura Sherman, president of the Michigan Energy Innovation Business Council, said in a statement.

The legislation had broad support among environmental groups, cities including Grand Rapids and Ann Arbor, and the Michigan Chamber of Commerce.

“We should be encouraging Michiganders to generate their own clean, renewable energy to lower electricity costs and reduce pollution in our air and water. This legislation fixes the current confusing patchwork of local tax structures for rooftop solar,” Nicholas Occhipinti, government affairs director for the Michigan League of Conservation Voters, said in a statement.

The bills apply to solar installations up to 150 kilowatts that are behind the meter, and don’t include larger-scale projects. H.B. 4465 and S.B. 47 apply to commercial and industrial installations, while H.B. 4069 applies to residential.

Advocates have said installing solar panels should be no different than making upgrades to other home products like boilers or furnaces.

Analyses by the House and Senate fiscal agencies said it’s unclear how local tax revenue would be affected by change. On Oct. 21, the Senate Fiscal Agency wrote that the bills present “several technical issues, including some that would affect the magnitude of any revenue loss.”

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