Green tax exemption proposed for homes

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wind and solar energy use. Photo: ecopolitology via Flickr

By MATT WALTERS

LANSING — New legislation may encourage the use of small-scale clean-energy devices, such as solar panels and small wind turbines, by exempting them from property taxes.

The goal is to make such devices more affordable, said Fred Schaible, legislative director for Sen. Dave Hildenbrand, R-Grand Rapids, one of the main sponsors.

The other main sponsor is Sen. Rebekah Warren, D-Ann Arbor.

“More people are installing these small-scale devices in residential settings and are getting hit with large property taxes because their property value rises,” Schaible said.

Schaible said property tax increases discourage homeowners from putting in clean-energy devices, which in turn hurts the economy.

“An individual will spend upwards of $1,000 to install these devices on their property, but when the property is re-assessed, they find themselves paying even more. It isn’t encouraging for the future of clean energy,” Schaible said.

He said property tax rates vary by municipality, and millage rates in rural areas may be lower than in urban areas.

He said the tax breaks would advance the clean-energy industry in Michigan.

“We want to help fuel this growing segment of the economy. Even if the device isn’t built in Michigan, local contractors would still be hired to install them,” Schaible said.

Samantha Harkins, legislative associate at the Michigan Municipal League, an Ann Arbor-based advocacy group that represents cities and villages, said the organization hasn’t adopted an official position on the legislation but its stance would depend on the bill’s impact.

“Generally, we don’t support tax cuts like these. Property tax revenue is important to cities and municipalities, especially with the limited means of revenue they have these days,” Harkins said.

However, Harkins said clean energy is an initiative it supports.

“Sustainability and clean energy is important to all of our members and good for the growth of our state’s economy. Whether we would be in favor of cutting property taxes to do it depends on how much revenue it would cost cities,” Harkins said.

Both bills are in the Senate Energy and Technology Committee.

Co-sponsors include Sens. John Proos, R-St. Joseph; James Marleau, R-Lake Orion; Coleman Young II, D-Detroit; Mike Nofs, R-Jackson; and Steve Bieda, D-Warren.

3 thoughts on “Green tax exemption proposed for homes

  1. Solar PV, Wind Turbines, etc. used to power / heat a home, or for that matter commercial buildings as well should not be factored in to the real estate tax.

  2. Wind and solar systems have many benefits. Although the fuel is free up front costs are high, so property taxes are high making these systems uneconomical. We’re not going to have many systems installed unless we get rid of the tax barrier. There won’t be property tax revenue anyway if people don’t buy systems. We stimulate renewable energy business and we will have other tax revenue from business and personal income taxes not to mention saving energy, reducing pollution, creating green jobs, etc.

  3. Exempting small-scale, non-commercial alternative energy production devices from property taxation should be a no-brainer. The current property tax law allows a patchwork of taxation of these facilities – from one municipality or school district to another – and creates inequities and disincentives for individuals to install alternative-energy-production devices.

    While municipalities necessarily rely on property values to generate operating revenue, encouraging the addition of local, alternative energy production devices would likely provide greater overall value to the community than the minor amount of revenue that could be gleaned from taxing them.

    Installation of these small facilities would accomplish a number of beneficial things:

    1. Local energy production eliminates wasteful losses in transmission of power – it is more efficient;
    2. Building the infrastructure will typically put local labor to work installing it;
    3. As the local and regional demand for these devices grows, it will create a self-sustaining market for building the devices here in Michigan, supporting an industry and putting our citizens to work;
    4. Dollars that would otherwise be sent out-of-state for fossil fuel (coal, nuclear, gas, oil) would remain in Michigan, creating a positive economic feedback loop;
    5. Baseload demands on our energy infrastructure would be reduced, eliminating the need for as many (or as large) fossil-fueled generation facilities; and
    6. Localized energy self-reliance will reduce our nation’s need to import energy and reduce the risk of Americans being held hostage to foreign energy.

    Thanks to the legislators who are stepping up to the plate to fix the current taxation inequities and encourage a cleaner and more-secure future for Michigan!

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