Energy bill would provide property tax exemption

An energy bill passed by the Senate in April intended to promote renewable energy includes a provision to exempt solar and wind energy systems from the local personal property tax.

Instead, such facilities would establish a payment-in-lieu-of-taxes (PILOT) agreement with the municipality in the amount of 5 percent of the income derived from the system’s annual gross electricity sales.

Currently, municipalities have the discretion to negotiate PILOTs or to tax the systems.

An amendment to the bill would require the Division of Local Services to examine the impact of the change on municipalities.

In a letter to Senate President Therese Murray, the MMA expressed its opposition to the bill’s tax exemption on renewable energy equipment.

“The language in Section 15 could certainly slash municipal revenue for many communities that have negotiated, collected and built these funds into their budgets, or are in the process of doing so,” the MMA wrote.

The Senate bill also would:
• Expand the Energy Efficiency Advisory Council to include a municipal representative
• Increase the net metering cap for municipalities from 2 percent to 3 percent, allowing more communities to qualify
• Direct the Department of Public Utilities to adopt rules that assure eligibility for net metering by October 2012, removing uncertainty in financing projects on the basis of eligibility concerns

The bill is awaiting action in the House.