MMA opposes solar tax policy changes

At a State House hearing of the Joint Committee on Revenue on April 9, the MMA submitted testimony opposing changes to the taxable status of solar energy-generating equipment.

Under current law, renewable energy equipment that serves as the primary or ancillary source of power for the property on which it is located is exempt from property taxation. Larger renewable energy developments, however, remain subject to taxation based on assessed value – or, municipalities may negotiate at their discretion a payment-in-lieu-of-tax agreement (PILOT) with the renewable energy system developer.

In February, the Department of Revenue, with the support of the Department of Energy Resources, held several seminars across the state for assessors and local officials to review protocols for assessing renewable energy equipment under state laws.

Bills under consideration by the Revenue Committee, however, would exempt larger-scale renewable energy equipment from the property tax, instead requiring a PILOT to the municipality based on a fixed or restricted range of annual gross electricity sales.

“These bills represent a dramatic and unnecessary shift in tax policy that would be harmful to municipalities,” the MMA stated, “and we urge you to protect the rights of cities and towns as they continue to work closely with the state to achieve our shared renewable energy goals.

“Municipalities have been true partners in driving progressive energy and environmental policy across the Commonwealth.”

The MMA pointed out that the solar industry does not need further incentives, particularly those that come at the expense of local property taxpayers. Under current conditions, the state is more than three years ahead of schedule to meet the solar capacity goal set by the 2008 Green Communities Act. The act established a goal of 250 megawatts of installed solar capacity statewide by 2017. As of April 1, the state had 243 megawatts of solar capacity, according to the Department of Energy Resources.

Solar development in Massachusetts has outpaced that in all other states except California, and Massachusetts has begun the process of developing new policies to drive the next phase of development.

Last year, language that would have made renewable energy equipment tax-exempt was excluded from the final version of the state’s comprehensive energy bill after local officials statewide expressed strong opposition to the change.