The Arizona Solar Tax and Who Benefits From It

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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. Karen,

    Why did S&P downgrade our rating on August 5, 2011? Had our debt suddenly ticked up to a new unsustainable high? If that were the case and our debt is ever increasing from even that point, why are we now back up to AAA rating?

    I believe the reason S&P downgraded the US is the Republicans played a lot of stupid games in threatening to not raise the debt ceiling. They walked right up to the edge and had the whole world holding its breath because if the debt ceiling was not raised we would have fallen into default. The Republican House was in the hands of a bunch of crazy people who thought it was more important that the debt ceiling not be raised and that default was no big deal. They are a bunch of ignorant yahoos and proved themselves incapable of governing. The world and S&P recognized this when they played their little game. The yahoos were still going to be in charge of the purse. THAT’S why we were downgraded. Yahoos in charge of the House and not understanding economics and willing to send their country into default.

    Be right back. Dinner. I will read the article.

  2. Annie – you mean the Sarah Palin that rooted out Republican fraud in Alaska and unwound backdoor deals with Big Oil that totally screwed Alaska, and then put a ton of money into the coffers of Alaska, so that people did not have to pay any, or hardly any, property taxes? And now she’s a multi-millionaire author, political commentator, and TV personality?That Sarah Palin?

  3. Sorry, but labeling a Christian politician a Christianist seems absurd. The vast majority of people in the US are Christian. And they all have jobs. We do not give them an extra, artificial label for their religion. They are not just Christians, they are Christians who dare to work in politics, which makes them Christianists.

    In this country, people are free to engage in whatever religion they choose, and still get to have jobs like the tiny minority of atheists. They don’t have to wear an armband, or be labelled a name that ridicules them.

  4. Bush accounted for about 18% of our current debt.

    After 5 years in office, is Obama going to accept responsibility for anything?

  5. S&P downgraded our credit rating for a while, too. And so have international credit rating agencies.

  6. Feynman – you see absolutely no connection between credit rating and debt?

    A credit rating is . . . literally . . . a determination by the credit rating agency on how likely it thinks it is that the US will pay back its debt. Literally. That is the definition of a government’s credit rating.

    But . . . you see absolutely zero relationship between debt and credit rating?

    Seriously, please read that article outlying the accepted flaws in Krugman’s conclusions. He really is in a very small minority. And any politician who follows him, who bases his votes upon his conclusions, is betting with all of our finances.

  7. If our economy hits a tipping point, we lose our credit rating, and China calls in its debt, what does Krugman think will happen? No worries, right?

  8. China holds approximately $1 trillion in Treasury debt in the form of bonds. They want our economy to thrive so we don’t default.

    The downside is that when China, say, engages in human rights violations, it puts us in a rather awkward position. How much can you complain to the country to which you owe $1 trillion?

  9. Annie – you can keep Christianists if I can keep spirally debt.

  10. Feynman:

    They build walls in Iran to topple over and squash gays. Female victims of rape are killed by stoning. I have known a few Arabs, and stoning is a really, really, really drawn out and terrible way to die. Under Sharia law, a father can sentence his daughter to The Woman’s Room, which is solitary confinement, for life, if he feels she is not upholding the family honor. Or he could just drown her in the family pool. Their honor code demands violence.

    But you are more afraid of bible thumpers??? When was the last time Christians stoned anyone in the US?

  11. Feynman:

    Please read the article I linked above at 2:44, which clearly explains that, even though the US maintains debt, it is not the same debt as 70 years ago, or even from the Revolutionary war.

    From your comments, I believe you have not read it yet. And if you are going to use Krugman as your reason to ignore out of control debt, then you should read both sides. If you still think he is correct, then you can defend him and show your reasoning, in specific reference to the points outlined in the article. ‘

    Otherwise, it comes across as blind loyalty.

  12. Egan Jones also got into a little trouble…

    On Jan. 22, 2013 the SEC announced that Egan-Jones has agreed to settle charges that they made willful and material misstatements and omissions when registering to become a NRSRO for asset-backed and government securities. Under the terms of the agreement, the firm is barred from rating government and asset-backed securities as a NRSRO for at least 18 months.

  13. That credit rating agency is not standard. Standard is Moody’s, S&P, and Fitch. As in every industry, there are outliers. Yours was an outlier.

  14. If you read the article it gave the reason for the downgrading of the US credit rating.

  15. Feynman, no they sure didn’t. I’m glad I was born a rebel, or else I might have turned out like Sarah Palin. 😯

  16. Annie,

    I hadn’t known about the ‘Sullivanistas’ but that would fit. I love him when he is on a tear and I agree with his position. (ha!) But sometimes he goes up and ‘over the edge’ until you are screaming at him to just Calm Down.

    I’m glad you are a survivor of The Assembly. I don’t think they would have appreciated your sense of humor.

    The poem and the kid in the car, BTW, was terrific. Dredd’s stuff, too.

  17. The three major rating agencies are S&P, Fitch, and Moody’s. They are considered the standard by the financial industry.

    FYI…

    The 2011 S&P downgrade was the first time the government was given a rating below AAA. S&P had announced a negative outlook on the AAA rating in April 2011. The downgrade to AA+ occurred four days after the 112th United States Congress voted to raise the debt ceiling of the federal government by means of the Budget Control Act of 2011 on August 2, 2011.

    The US currently maintains its AAA rating.

    I assert that the downgrade by the major rating agency on August 5, 2011 was due to Republicans threatening to refuse to raise the debt limit by August 1, 2011. Until then, the US rating had never been downgraded.

    1. Annie – you are like Sarah Palin, your politics are just different.

  18. Ohhhh, I know all about the Christianists, having grown up in the Assemblies of God church. You know the one Sarah Palin grew up in. Yes I read Sullivan. Some people are fixated on him and call everyone Sullavinists, know anyone
    like that? 😉

  19. Annie,

    I first learned about the Christianists over at the Sullivan blog. He is a very devout Roman Catholic, sometime conservative, that has written extensively about the Christianists. They are a fearsome group.

    Literally, (ha) the Onward Christian Soldier type. I never cared for that hymn….

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