Lawsuit filed over property taxes on solar panels

Published on NewsOK Modified: July 1, 2014 at 6:31 pm •  Published: July 1, 2014

PHOENIX (AP) — Two solar companies are asking an Arizona court to overturn state tax officials' decision that property taxes must be paid on leased rooftop panels that produce electricity.

SolarCity Corp. and Sunrun Inc. filed a lawsuit Monday challenging the state Department of Revenue's 2013 decision that leased panels don't qualify for property-tax exemptions that apply to panels that are owned by homeowners and businesses and used primarily for on-site consumption.

The department's decision said the homeowners' leased panels are subject to taxes like renewable-energy generation equipment owned by utilities because the leasing companies, not the property owners, own the panels but don't use the electricity.

Solar power plants are not exempt from property taxes.

If upheld, the department's decision would subject homeowners with leased panels to property taxes because the leases have provisions passing any taxes to the homeowners.

Based on the department's figures, a $34,000 solar-panel array leased by a homeowner would cost approximately $150 in property taxes in the first year, decreasing annually year as the system depreciates.