Rooftop solar dodges a bullet as Legislature closes
By Phil Riske, managing editor
STATE CAPITOL – The devil’s in the details, and a detail in the innocuously titled “2014 Tax Corrections” (SB 1031) would have implemented a tax increase on people who finance rooftop solar systems. Financing with leases equates to 80 percent of the residential solar installed in Arizona reaching more than 20,000 homes. The tax increase would have also been implemented for hundreds of churches, schools, and community centers with solar had it not been for a 13th hour amendment offered by Rep. J.D. Mesnard (R-Chandler).
The amendment struck the implementation of the rooftop solar tax from the bill, which later passed without it.
Solar industry and home solar owners can now focus on overturning a Department of Revenue (DOR) ruling that reinterprets the state’s longstanding policy against the tax and unilaterally declared that such a tax must be implemented. So, while SB 1301 would have implemented the tax via statute, the solar industry is left to wrestle with DOR’s standing interpretation, which will send new tax bills to thousands of residents if not fixed.
The tax would have resulted in roughly $15 per month of new taxation on an average-sized solar system for the life of the system. It would not have affected systems purchased outright, creating a disparity among neighbors with rooftop solar.
Rooftop solar owners already have been hit this year with an average $5 monthly fee, which was approved for Arizona Public Service by the Arizona Corporation Commission.
Although the utility has stated it was neutral on SB 1301, Rose Law Group Reporter has confirmed the utility had been lobbying for the solar portion of the tax bill, and APS admitted as much in a recent letter to Corporation Commission Chairman Bob Stump.
At a March committee hearing, Chris Wahl from SolarCity testified solar energy provides 8,500 jobs in Arizona, and the tax could “decapitate” the industry.
“Let’s keep decapitation of the solar industry at bay,” Wahl said.
Court Rich, director of Rose Law Group Renewable Energy Dept. says such a tax would destroy the rooftop industry, and “any potential savings will be drowned out” by the new tax if enacted. Rich added, “It is hard to imagine that this tax originated in the executive branch run by a governor who has declared her desire for Arizona to be the solar capital of the world. DOR’s faulty interpretation started all this and must be fixed.”
There is no difference between how a financed or a cash-purchased solar system interacts with the grid.
Proponents claimed the measure was not anti-solar, but more about business models that result from home solar.
(Editor’s note: Gov. Jan Brewer said Wednesday she will call a special session to deal with Child Protective Services issues.)