Community Solar Participants Hit With Property Tax Forms

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The site of the 11,280 panels, San Antonio's newest renewable energy asset, is located in Adkins, Texas. Photo by Kathryn Boyd-Batstone.

Kathryn Boyd-Batstone / Rivard Report

CPS Energy's community solar farm is located in Adkins, Texas.

Participants in CPS Energy’s community solar project may have to pay property taxes this year on the electricity their solar panels produce, despite a state law that exempts solar panels that people install on their homes.

This year, those who bought into the community solar project received so-called rendition forms from the Bexar County Appraisal District, a quasi-state agency that appraises property in Bexar County for taxation to fund local municipalities, school districts, and other government entities.

The solar tax affects the 244 people who bought into the system of roughly 11,200 panels designed by Colorado firm Clean Energy Collective, according to CPS Energy figures. The 1.2-megawatt array east of San Antonio opened in 2016.

The tax issue remains relevant, with CPS Energy recently putting out a request for proposals to build a new community solar project even larger than the first – up to 5 megawatts.

The rendition forms that the Bexar Appraisal District sent to the solar panel owners allow the district to gather information about taxable property that provides income to the owner.

Texas’ tax code provides an exemption for property taxes for solar and wind installations “primarily for production and distribution of energy for on-site use,” according to a section of the code shared by staff of the Texas Comptroller of Public Accounts.

That language doesn’t cover solar panels installed off-site, Chief Appraiser Michael Amezquita said.

“I’d prefer not to put them on the [tax] roll,” he said, but he added that state law compels his office to add everything to the tax roll that’s not specifically exempted.

Ann Marie Nikolich is one of the affected solar panel owners. She’s a secretary who purchased the panels in the hopes that they could be part of her financial plan for retirement.

In December, Nikolich received a letter from Clean Energy Collective stating that she might have to pay taxes on her system.

“Now that your solar panels are producing power to the grid, you may receive a property tax bill in the coming years, including this coming tax season,” the letter states.

This came as an unwelcome surprise. Nikolich was familiar with the state’s exemption and thought it meant she wouldn’t have to pay taxes.

“I never intended to go into business for myself,” she said.

From Amezquita’s perspective, the issue is a result of Texas’ tax code not yet having caught up with a new solar model.

“The truth is, I’ve had 37 years of experience, and this is the first time I’ve encountered this,” he said. “It’s really a lot of trouble, and there’s not a lot of money involved here.”

Since the panels have not yet been appraised, Amezquita is not sure exactly how much money the property tax would bring in. The exact figure would also depend on where in Bexar County a panel owner lives.

He did give a ballpark estimate of $45 per year for a person earning $1,500 in bill credits from his or her system, taxed at a rate of $3 per assessed $100 of value.

Amezquita said he hopes that the Texas Legislature will address the issue in its 2019 session.

 

5 thoughts on “Community Solar Participants Hit With Property Tax Forms

  1. Brendan, are the taxes based on the value of the solar asset or the income/savings from the system? When you install solar panels on your house, the system increases the property value but not your property taxes due to the State level exemption.

  2. If this ballpark estimate given at the end is roughly correct, this sounds reasonable, if the solar-panel owner really doesn’t pay $1500 to CPSEnergy (saving up those nickels and dimes for the upcoming yearly tax … devil’s in the details, however, and I wristslap CPSEnergy for not making this issue crystal-clear to us SAers)
    Thank you, Brendan, the Fourth Estate still stands. I’d called awhile back to start my participation in this program, but will hold off until this matter is cleared up and presented to us in an expedited, yet still thorough, manner.

  3. Some of us purchased these panels because we live in a condo. Nowhere to put solar panels on our roof – not an option. Why are we being discriminated against? My neighbor in a stand-alone traditional house does not get taxed separately/additionally like we suddenly are. This is plain WRONG. Unequal treatment for CPS solar panel purchasers in multi-family dwellings like me. Legally not defensible. Does there really need to be a lawsuit on this matter? – or can someone at the Bexar County Tax office use some common sense here??? Who will invest in non-rooftop solar in the future with this discriminatory taxation?? Shooting yourselves in the foot people…

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