Sound Thoughts: Solar Energy Property Tax Exemptions

[Harvey Abouelata]

Currently there are no state policies for solar energy systems’ property tax. Consider not only allowing solar systems to be property tax exempt, but in addition to offer a tax credit for purchasing solar panels produced within our state. A state policy can be structured to benefit Tennessee. Systems with solar panels made in-state would offer a property tax credit the first year, and then become tax exempt for the life of the system. Systems with panels made elsewhere in the USA would be taxed on the cost basis after the grants, and finally, if the panels installed were produced overseas, no tax credit would be offered. Structuring it thus, the property tax credit will further emphasize our commitment as a state to build a solar energy industry and to create green jobs.

Recently, the State of Tennessee, and in particular the eastern corridor, has experienced a boom of activity connected to the solar energy industry and its development. Of note, Confluence Solar, Inc. recently announced its expansion of production and its new high efficiency solar cell plant expecting to have a staff of 250 by 2011 and 500 by 2013. Confluence’s announcement comes after the realization of two other billion-dollar deals in the State of Tennessee, Hemlock and Wacker. These recent solar investments pair nicely with SHARP’s solar panel manufacturing facility, producing photovoltaic panels in Memphis for years.

Many small Knoxville area businesses have been taking advantage of the renewable energy grant money made available. For instance, Dixie Roofing, Lock Medic, Apalachee Nursery, and Wampler’s Farm Sausage all installed photovoltaic systems in 2009. There has been much synergy of late in our area producing this economic boom.

Synergy. It’s a rare commodity these days. However, solar energy synergy is just what the state of Tennessee has been producing. Government, business and academics are all working together with a common purpose. The product of this synergy is the attraction of more industry. The attraction of more industry creates a larger tax base. It’s win-win. Everybody’s happy.

What has created this synergy? First and foremost has been the support of the politicians promoting these grants and initiatives. Phil Bredesen, our Governor, was recently nominated for the American Solar Energy Society’s Charles Greeley Abbot Award, recognizing a stand-out in the solar community who has made a significant contribution to the society or to the field of solar energy. That’s a big deal. In addition, there is an influx of potential grant money in our state. The Tennessee state grant fund encompasses $13M. The 170 solar photovoltaic systems that this $13M will support has the potential to bring roughly $11M in the Federal energy grants or tax credits and USDA Rural Development grant funding to the state. The TVA Generation Partners program production incentive (again estimated) will generate around $10,000 in revenue for solar photovoltaic system owners annually. That’s $1.7 million of annual revenue to system owners using their roof space to push solar energy onto the power grid each year. The total grants and incentives is estimated to be around $24.5M. That’s a lot of incentive.

The synergy evidenced has created a momentum, which in turn has created the broadened tax base and jobs in the marketplace. A solar-friendly property tax makes sense for our economy and our state. Lots of positive momentum to support solar. And why not support it? Solar energy synergy not only sounds cool, it is cool.

n Positive support for solar from state and federal levels of government (and Knoxville- DOE Solar America City)

n TVA Generation Partners program incentive

n Education/training support – Pellissippi State Community College, Cleveland State Community College, the University of Tennessee, Austin Peay State University, Walter State Community College, etc. all doing solar demonstration units or training programs

n Solar manufacturing supported – SHARP, Wacker, Hemlock, Confluence

n TN-CET grant

n USDA Rural Development grant/loans

n And much more

From a state perspective, none of these programs individually are the reason Tennessee has had such great successes. The USDA program works because the TN-CET is available, the universities have added solar to their curriculum to meet the increased demand for qualified installers, and industries consider locating in Tennessee because we are rapidly building an educated workforce. It so follows that other employers will begin to look to Tennessee to be closer to the raw material suppliers mentioned earlier.

To keep this momentum going, everyone should contact their state representatives and let them know we would like to see solar systems - both residential and commercial - tax exempt. Let’s continue the momentum and lead the country in solar energy industry development! A state that used to be known for its moonshine can now be known for its sunshine.

Harvey Abouelata

VP sales & Marketing

[phone]

Efficient Energy of Tennessee

We save you money doing the right thing!

www.eetenn.com

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[Harvey Abouelata]

Logically, I would surmise justifying giving a tax credit to solar panels made outside of the country, such as the Sunpower product -is made in the Philippines, a tough pill to swallow for the assessors much less the tax payers. The motivation is to increase our state tax base revenue and create jobs in our state. Perhaps the Pilipino government would offer a rebate for people who purchase panels abroad? I think that would make more sense as their country is receiving the monetary benefit from the sale of that product.

[James Harshbarger]

All solar panels sold here in Tennessee should have property tax credits. An across the board tax credit would be a move in the right direction helping to solidify the need to further the affordability of solar energy production for businesses and home owners. The recent announcement of Confluence Solar manufacturing coming to East Tennessee is a welcome expansion in our solar community as they will produce quality single crystal silicon similar to SunPower, the world's most efficient solar panel. Locally, Lock Medic, Apalachee Nursery and others were installed with with these panels. These are exciting times for the solar industry here in East Tennessee. Let's make - all - solar panels installed in Tenneessee tax exempt!

James Harshbarger
Sustainable Future, LLC
(865) 684 - 4426
www.sustainablefuture.biz