By Frank Andorka, Senior Correspondent
What Happened: Yesterday, the Arizona Supreme Court ruled that homeowners that lease rooftop solar systems do not have to pay state property taxes on that home improvement.
- The court found that since the homeowners don’t own the “electrical generation facilities,” they have earned a state property tax exemption
- It refused, however, to offer an opinion on whether counties could levy property taxes on the solar arrays.
- The case stretches back to 2013, when the state’s Department of Revenue, with the support of APS (the state’s largest utility), decided it could collect property taxes on the arrays.
SolarWakeup’s View: The Arizona Supreme Court’s decision yesterday to provide a property tax exemption for homeowners who lease their rooftop solar arrays was not only the right decision, but I believe it will go a long way toward restoring a residential rooftop solar market hammered by Arizona Corporation Commission (ACC) decisions over the past two years.
As you may or may not recall, the ACC ended a bruising three year battle over net metering in December 2016 by deciding to end retail net metering (a 1:1 exchange for electrons at the retail rate) for all new rooftop solar installations (in fairness, it did eventually grandfather current users, but not without a huge effort on the part of the state’s solar industry).
The state’s rooftop installers worried it would devastate their market, and the ACC’s decision certainly slowed down the market, all while APS started building utility-scale solar at an ever-increasing pace. The utility-scale building could be seen as a direct challenge to the rooftop industry and as a blatant attempt to maintain their monopoly generation power.
Yesterday, the Arizona Supreme Court evened the playing field a bit, at least for companies that lease panels to their customers. Frankly, it would have been a much bigger victory had the rule applied to all rooftop solar installations (like Florida did two years ago for commercial rooftop installations), but right now Arizona rooftop installers will take anything they can get.
Sometimes a small victory can blossom over time into a much bigger one. The Arizona Supreme Court decision yesterday could be the start of just such a process.
More:
Solar customers don’t have to pay some taxes, state Supreme Court rules (AZ Central)