The Arizona Solar Tax and Who Benefits From It


Respectfully submitted by Lawrence E. Rafferty (rafflaw) Weekend Contributor

When I think of places that would be ideally suited for taking advantage of solar power, Arizona is high on the list.  There are approximately 20,000 Arizona buildings utilizing solar collection technology to replace or supplement normal power sources. However, that number may soon decrease if a new “solar tax” is implemented.

“A new interpretation of state law in Arizona could force customers to pay property taxes on leased solar panels. In a state with an estimated 20,000 solar customers and 85 percent of new solar installations being leased systems, the implications of an extra charge are tremendous. The new tax could result in an additional $152 per year for a residential solar array and even more for larger installations, the Arizona Republic reported. What’s more, the tax would apply to both new and existing customers.” Think Progress

At first glance, I guess it should not surprise anyone that a new tax may be initiated.  However, when that tax is a tax on solar panels on commercial and residential buildings and includes solar panel arrays that are leased, it raised some eyes in Arizona.  Why would the State of Arizona decide on a tax on the collection of power of the sun?  The answer may surprise you.

“So, who would support the effort to charge solar customers more money? Solar advocates in Arizona point to the state’s largest utility, Arizona Public Service Company (APS).

Leasing solar panels is often the only option for middle class customers who want to go solar but can’t afford the cost of purchasing the array. And as rooftop solar in particular booms across the U.S., it’s middle class families that are leading the way — posing a real threat to utilities like APS. In fact, “solar technology is being overwhelmingly adopted in middle-class neighborhoods in the U.S., as more than 60 percent of solar installations are occurring in zip codes with median incomes ranging from $40,000 to $90,000,” according to a recent analysis by Mari Hernandez of the Center for American Progress. This trend has utility companies “worried that rooftop solar may undermine their business models as more of their customers go solar and buy less power from them,” Hernandez explained.” Think Progress

I guess maybe I should not be surprised that the APS may be against technology that allows its customers to buy less energy from the utility.  I guess I should also not be surprised who APS has teamed up with in order to fight the use of solar power in Arizona.

The public utility has ties with ALEC, the American Legislative Exchange Council and the state regulatory body also has very strong connections to ALEC.  “In the ongoing fight over whether Arizona will continue its remarkable expansion of solar energy, a ThinkProgress analysis reveals four of five members of the state’s energy regulator are tied to the conservative anti-clean energy group, the American Legislative Exchange Council (ALEC).

The fight centers on Arizona Public Service Co. (APS), the state’s largest utility, versus solar energy companies over how much customers should be compensated for the energy produced by solar panels installed on their homes and businesses. APS believes customers receive too much credit for the excess energy produced by their panels while the industry maintains changing the policy, known as net-metering, would devastate their promising and rapidly expanding industry.

The state’s energy regulator, the Arizona Corporation Commission (ACC), is expected to begin hearings on the net-metering proposal in November. Four of the five commissioners are members of ALEC, the group backed by fossil fuel interests, major corporations and the ultra-conservative Koch brothers. In 2012, ALEC dedicated its efforts to dismantling renewable energy laws around the country and though they failed completely in that effort, leaked documents from their recent annual meeting indicates they have no intention of backing down from the fight against clean energy.”  Think Progress 2

Doesn’t it seem that the Koch Brothers have their dirty energy fingers in just about everything?  As we have seen in the linked articles, the new tax would benefit the public energy utility to the detriment of many middle class consumers who are trying to save a few dollars in energy cost, while at the same time supporting the goal of using cleaner energy sources.  It is interesting that the idea of a new tax is proposed by the same organization and its backers that are against other clean energy supporting taxes that would negatively impact their corporate interests.

According to the free market proponents like ALEC and the Koch Brothers, the market is only free when it benefits their interests.  Everyone else, including the planet be damned. The fact that many of the consumers who would be disadvantaged by this solar tax would be middle class homeowners is just icing on the cake for ALEC.

It bears repeating that the additional cost of the tax would range from approximately $152.00 per year for a residential array and $9867.00 per year for a large commercial installation.  Is the Arizona Public Service Company trying to destroy the solar industry?

Will the ALEC packed state regulatory commission find in favor of the ALEC proposal or will it back the solar energy industry and residential and commercial consumers?  What do you think?

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422 thoughts on “The Arizona Solar Tax and Who Benefits From It”

  1. There is a really cool solar program in the states right now that allows folks to have a system installed for no out of pocket cost – home owners pay the solar company for the energy the system makes along the way. It’s a good program to get for one’s home because solar energy is cheaper and cleaner than regular utility energy.

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    1. The State has no more money for this program here in Florida and its long been out. I’m told to provide the electricity for my home it would cost well over $65,000 installed. Good idea but how many people can afford this and all the social programs are bankrupting the States and Federal Government. This math is not working out financially for people. Money doesn’t actually grow on trees. Someone has to plant a fruit tree, protect, grow and sell the fruit and have an after tax profit to be able to do it again next season. Only the largest most efficient companies with huge economies of scale can do this anymore thus the middle class and small businesses are being bankrupted in America. It’s a math and economic thing for those that don’t understand it. Excessive taxation and regulation make it almost impossible to complete against the conglomerates who can take advantages of the tax system. The rules are the same for everyone but if the smaller companies can’t take advantage of them, what good are they. We need to reduce the tax and regulatory liabilities on the small businesses. Go ahead and try to tax big business, that still doesn’t help the small businesses, it only really helps the bureaucracy.

  2. I would put no special tax on solar, I wouldn’t even consider income from net metering under a certain amount to be taxable. However, solar should not receive any subsidy, either, any more than oil or gas should get subsidies.

  3. Paul,
    your comment alleges that if there are a lot of medical mal suits that attorneys must be doing just to get back at doctors out of jealousy. False premise.
    Byron, the enslaved doctor law? I must have missed that talking point. The tort laws enable anyone who is injured due to someone’s negligence, be it a doctor or non-doctor to sue for compensation. And people who think their attorney is guilty of malpractice can sue for compensation. Karen, once again it is better for the discussion to provide some evidence when you are accusing people of killing veterans for politics.

    1. rafflaw – my premise is that there are a lot of medical mal suits where attorneys want the money that doctors have (or their insurance carrier). Am I wrong in this? I see ads on my tv all the time trolling for clients for medical mal.

  4. rafflaw:

    then lets have nationalized legal aid for all. Pay a few hundred dollars per month and you can see any lawyer you want. And the fees are set so that lawyers cant charge a sh*t pot full when they win a case, just a small fee determined by the government.

    The enslave doctors law was written by attorneys, most of our elected officials are lawyers and that is the problem, they know the law but precious little else. And many lawyers just know the crap that passes for law with no idea of what lies behind.

    If the Supreme Court said so, it must be true. What a big crock of horse sh*t.

  5. The VA had a goal to provide service to vets within 2 weeks. So when they got backlogged, they purged records. Vets actually died waiting months, and sometimes years, for a first appointment. All for political reasons, to make it look like the VA was meeting its goals.

    Medicaid pays doctors a pittance and provides substandard care. Medicare provides better care, when combined with supplemental insurance, but it also pays doctors very low. Doctors placed limits on the quantity of Medicaid and Medicare patients, so that they could see enough patients with individual or employer insurance plans to make a living.

    But now Exchange policies slashed remuneration to the levels of Medicaid, which does not even cover the cost of service.

    This is what government run healthcare looks like.

  6. Nick,
    attorneys as a group are not jealous of doctors. Attorneys are NOT sticking it to Doctors.

    1. rafflaw – so those medical malpractice suits are just because attorneys are bored?

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