State solar tax is bait and switch
Photo by James Stack
James Stack installed a solar array to power his home in Andover.
As citizens concerned about greenhouse gas emissions, among other things, my partner and I have investigated both wind and solar as an alternative to the predominately electric house in which we live here in Vermont.
Our stone, concrete, steel and glass home was built during the mid-century and was 100 percent electric at the time we purchased it in 2007. When we began planning for renovations, we discovered we could build a new, two-bedroom house for the prohibitively expensive cost of changing the electric radiant heat throughout the house to a more efficient system. We were stuck.
We began considering alternative forms of energy, having heard that Gov. Peter Shumlin wanted Vermont to be known as the alternative energy state. We initially looked into a wind turbine on our property, which we discovered would need to be either too far from the home or too tall in order to catch the air, as we are on the downwind side of a hill. Distance and height made wind prohibitively expensive.
So we investigated solar energy, which we discovered came with both state and federal incentives to install solar panels.
We interviewed several solar companies and reviewed their proposals in terms of our annual electricity consumption. We wanted a system that would cut the amount of electricity we were using so our carbon footprint would be reduced, while also being affordable to us after applying both the Vermont state incentive and the federal rebate. We agreed upon a system that was 10.488-kilowatt AC and received a certificate of public good on Sept. 17, 2012. We were on our way.
The renewable energy goals as established by H.56 as amended (Sec.6, 30 V.S.A. §8001) “finds it in the interest of the people of the state to promote the state energy policy … by: …(2) Supporting development of renewable energy and related planned energy industries in Vermont, in particular and the jobs and economic benefits associated with such development, while retaining and supporting existing renewable energy infrastructure…. (6) Contributing to reductions in global climate change and anticipating the impacts on the state’s economy that might be caused by federal regulation designed to attain those reductions. (7) Supporting and providing incentives for small, distributed renewable energy generation, including incentives that support locating such generation in areas that will provide benefit to the operation and management of the state’s electric grid.”
The system went live in October 2012. In June 2013 we discovered that the state (and some municipalities) has begun taxing solar installation above 10 kilowatts. It appears that this is a result of Act 127, since the tax is going to the state’s Education Fund (Act 127 did not grant the authority for municipalities to tax solar projects and yet it has started; also, municipalities may choose to exempt renewable net-metered projects from this tax).
This is a new state and municipality tax burden placed on private homeowners and farmers who have installed solar panels above 10 kilowatts to help eliminate greenhouse gas, lower their carbon footprint, and participate in what they had thought was what the state of Vermont wanted — to be known as the alternative energy state.
This tax flies in the face of Gov. Shumlin’s and the Legislature’s goals as stated above. While other states (California, Montana, Ohio, New York, and, yes, even Texas) are providing tax exemptions of renewable energy, Vermont is crippling itself for future generations of Vermonters. Adding this tax burden to its citizens will hamper Vermont’s goal of reaching 90 percent renewable energy by 2050.
For anyone (and I include myself) to have installed renewable energy solar panels prior to this tax being passed into law, this is clearly a bait and switch. Claiming to want to enhance Vermont’s reputation by incenting its citizens to install alternative energy systems, and then to tax those very citizens who comply, is gross and indecent behavior — a clear “gotcha!”
The great people of Vermont need to know what has been done: We’ve been promised one thing without any tax burden having been disclosed, and when we comply with the promise we are finding that we will be taxed for it. This is unacceptable, and this added tax burden should be removed.
If Vermont doesn’t want to reach its goals and to be the last state to move towards alternative energy by driving alternative energy businesses and jobs to other states, then it should continue this tax burden; but at a minimum, those of us who have been impacted by this bait and switch should be grandfathered such that we do not have to pay this tax.
Should anyone knowing about the tax decide to proceed, then the tax will have been clearly spelled out, and they will have made a choice, a choice we did not have, to be impacted by the tax.
By the way, the fact that the state is putting in 900 solar tracking panels at 10 separate projects around the state, each receiving roughly 90 solar panels equating to well over the 10-kilowatt limit for taxation, begs the question as to whether or not the state will tax itself at these locations; and will the municipalities tax the state as they have ordinary citizens? If not, this will show an unfair disadvantage for the state against its citizens.
Gov. Shumlin went on to say that it is critical to move Vermont from fossil fuels to renewable energy: “The state is leading by example, using solar projects to improve the environment, create jobs for Vermonters, and hold down energy costs for taxpayers.”
However, the state is receiving the $12 million to $14 million in equipment for free — it will be a long time to recoup those costs for AllEarth Renewables — and where is the pay for the jobs coming from? Sounds like smoke and mirrors. And if the state taxes itself under the law as it should be required to do, who will pay that tax but those for whom energy costs are supposed to be held down — you and me.
The alternative energy tax does not promote economic development in Vermont from renewable energy as cost-effective and environmentally beneficial, and it should be done away with — the sooner the better.
James Stack is a retired advertising and financial executive, living and writing in Andover.