“A tax is nothing more than disincentive for promotion, for industry, and for the free market system” was the quote heard by T.U.S.K. co-chairman Barry Goldwater Jr. on June 4th as he addressed a crowd of hundreds. The organization, Tell Utilities Solar won’t be Killed, and solar industry companies held a brief and impressive well organized rally last Wednesday in front of the Arizona State Capitol to petition Republican Governor Jan Brewer to not allow the Arizona Department of Revenue to tax leased roof top solar systems. Mr. Goldwater was also quoted as saying the tax on leased solar systems is “not the American way, not the Republican way, and certainly if you are a conservative, you don’t believe in taxes.” So why is Republican Governor Jan Brewer allowing the Department of Revenue to Tax Leased Solar Systems?
The Arizona self named “Solar Queen” Governor has stated that she would support a bill that crossed her desk preventing the taxation of leased solar systems, however, at this time one has not been proposed. She has also stated that she will not interfere with the policies of the Department of Revenue. Goldwater’s response to Arizona’s State Chief Executive? “They work for her. She has the authority to step in. She has influence. She can make that happen.”
There is already a state law that exempts property taxation on homeowners who purchase or own photovoltaic panels. However, under a review process, the Arizona Department of Disincentive has determined that the owners of the leased panels like SolarCity and SunRun should be taxed like any other power generating utility company. It is important to understand that the homeowners themselves are not being taxed, but the companies that own the systems must now carry a heavy burden for supplying clean renewable energy to the utility grid.
While the companies which sell leased systems are within their rights to pass on the expense to their customers (a risk in purchasing a leased system) they at this time are claiming that the new tax burden will remain on their balance sheets. For smaller leasing rooftop solar companies, this could mean shutting their doors and closing down their business. That in turn may leave many homeowners who purchased leased systems without a servicing company. Worse yet, those leased systems may have to be removed if the smaller installation companies are forced to close shop!!
G&S Electric Inc. has always advised its customers against purchasing a leased system due to the risks involved in lack of ownership. We are sad to see our warnings taking such a harsh turn toward reality. As a business owner, we decided long ago that selling leased systems was not the type of product G&S Electric Inc. could stand behind. We needed a product that had permanence, reliability, warranties based on the units themselves not based on the companies providing services. We opted to only sell solely owned rooftop solar systems.
Property value increases can only be realized with true ownership of a rooftop system. Laws are already on the books protecting homeowners who own rooftop solar systems. A leased system is not as secure an investment. If a company goes bankrupt or has financial troubles, they may be able to take back the panels they own. Like leasing a car, leasing solar panels comes with many risks. Buying a system and owning outright allows homeowners to know their investment is safe and permanent. This is the only type of product G&S Electric Inc. can stand behind.
However, not everyone can afford to own their own system. As supporters of rooftop solar, we are not against or in competition with leased systems. We fully support leased rooftop solar systems for people who feel it is the right choice for them. We stood by T.U.S.K. on June 4th and rallied right along with Solar City, SunRun, and many many other solar advocates. This taxation on leased solar panels is wrong for Arizona and harmful for the solar industry. G&S Electric Inc. believes, like the hundreds of people out that day on the state capitol lawns, and like many signs and shirts read: “Rooftop Solar is RIGHT!!”