The Register Citizen (Torrington, CT)
Proposed bill could resolve ambiguity over solar assessments
More than 200 lawsuits have been filed by solar installation companies since 2017 against 19 different Connecticut municipalities.
The issue lies with a state law exempting renewable energy sources like solar panels “installed for the generation of electricity for private residential use” and whether that should cover systems that feed power onto the grid or are owned by a third party.
Most solar installations involve such third-party ownership agreements, due to the steep upfront costs, according to the Connecticut Green Bank, a quasipublic agency that arranges financing for clean energy projects.
Beginning around 2016, some assessors throughout the state began revoking previously exempt solar projects and denying applications for new exemptions.
That prompted many of the companies to file lawsuits, saying assessors were taxing them illegally.
Hearst Connecticut Media found 206 such lawsuits filed since 2017. The cases have all been sent to Waterbury Superior Court.
Some towns, like Stratford, have been moving to settle some of the lawsuits. Other cases remain pending.
“It’s a unique situation because of the consolidated nature of the cases,” Ansonia Corporation Counsel John Marini said.
Ansonia is a defendant in 11 lawsuits filed by solar companies since 2018. “Discovery is still ongoing, but there may be a potential for a resolution,” Marini said.
One possible resolution to the perceived ambiguity of the state law is a proposed bill from the legislature’s Planning and Development Committee that would clarify the exemption to include all solar installations that have been targeted in recent years.
A public hearing on the bill was held Feb. 3.
Prospects for passage are unclear as yet. Similar efforts have stalled in past legislative sessions.
“I don’t know what the outcome will be,” Stratford state Rep. Joe Gresko said.
“It looks like it’s prospective,” Gresko said of the bill proposed this year. “They’re closing the door behind them, saying this is tax-exempt going forward.”
But that would still leave a question mark over what happens with past tax payments in dispute, he said. “I think they should be exempt,” he said. “That was the legislative intent of the bill when it was written.”
However, he said, he wouldn’t want any solar companies who paid the taxes and might have passed the cost onto homeowners to get enriched unjustly.
“The crux of the issue for me is I would love to get proof — and I don’t know if there is any — that the cost the individual municipalities put back onto the solar companies wasn’t in turn passed on to the customer,” he said. “Let’s say a settlement is reached, and the solar company gets a windfall from the municipality. What’s the guarantee that’s going to be passed on to the customer?”
A spokesperson for the Sunrun, Inc. the country’s leading solar installer, which is involved with lawsuits against most of the 19 municipalities involved, said the costs of the unexpected property tax assessments aren’t being passed on to customers.
In testimony to lawmakers this month, Kyle Wallace, the company’s senior manager of public policy, urged lawmakers to pass the bill.
He noted the bill’s prospective nature, and said adjudicating disputed tax payments made in the past would be “best resolved in other venues.”
“All parties would benefit from the clarity provided in H.B. 6106 to avoid further litigation on this matter,” Wallace said.
His testimony included a letter from state Senate Majority Leader Bob Duff, the chairman of the Energy and Technology Committee, at the time the exemption was first enacted in 2007, which said “the legislature did not intend to deny an exemption based on participation in net metering or ownership requirements that are not expressed in the statute.”
Cromwell Tax Assessor Shawna Baron said the law isn’t as clear as Duff and the solar companies make it out to be.
“It’s a very gray issue,” she said. “There’s many differences on these things.”
Baron, a past president of the Connecticut Association of Assessing Officers, said assessors throughout the state are always reviewing state laws regarding exemptions.
“With everything that’s happening with state budgets and everything like that, everyone looks more closely at these statutes,” she said.
Cromwell is facing 22 lawsuits that Baron said involve about $400,000 in disputed taxes since 2016.
She said state lawmakers could resolve the issue easily — but haven’t.
“If you look at the statutes, some of these statutes are very clear,” she said. “If the legislature wanted solar to be exempt, it would be very easy for them to put in the statute: ‘solar equipment is exempt.’ That’s not the case if you look in the statute. There’s all these qualifiers.”