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Chamber Testifies to State Tax Commission on Solar PILT

Advocacy News – September 14, 2021

Unfortunately, there is one major obstacle to large-scale solar development in Michigan – a personal property tax regime that is out of step with that in other Great Lakes states and other states that have seen significant solar development.

The Michigan Chamber of Commerce testified today in front of the State Tax Commission regarding a proposed valuation study on solar installation costs and tax assessments, making it known that there were several concerns regarding the report and calling for the Commission to re-evaluate its findings. The dollar amount concluded in the report, which would make the tax regime for solar installations in Michigan the most expensive in the Midwest region, had used several assumptions that artificially inflated the capacity rate. The report was the culmination of several months of stakeholder meetings on how the state should approach the assessment of solar personal property taxes.

“In order to achieve the level of solar generation deployment needed to keep energy rates competitive in the state, we need to put into place policies that will help incentivize its development. We fear this valuation report would have the opposite effect. In fact, Michigan could miss out on over $11 billion in private sector investment in cutting edge, high technology solar energy equipment,” said Mike Alaimo, Director of Energy and Environmental Affairs for the Michigan Chamber. “Predictability and uniformity on costs and taxes for solar installations are paramount in ensuring certainty for developers that rely on long-term fixed rates. Creating uncertainty in the marketplace or increasing the costs of power generation will have a negative impact on the grid and increase energy rates for Michigan consumers and businesses.”

Last year, the Michigan Chamber led the charge on  SB 1105 (Vanderwall) and SB 1106 (Daley): bills that would exempt solar energy equipment from personal property tax and impose payment in lieu of tax (PILT) in its place. Working with solar developers, Michigan’s major utilities and the environmental community, the Michigan Chamber led the effort to eliminate a failed personal property tax on solar equipment and apply a simple, flat rate, consistent PILT based on a solar energy facility’s capacity.

Governor Whitmer ultimately vetoed that legislation without explanation.

If you have any questions, please reach out to Mike Alaimo at malaimo@michamber.com.

Advocacy News – September 14, 2021

Unfortunately, there is one major obstacle to large-scale solar development in Michigan – a personal property tax regime that is out of step with that in other Great Lakes states and other states that have seen significant solar development.

The Michigan Chamber of Commerce testified today in front of the State Tax Commission regarding a proposed valuation study on solar installation costs and tax assessments, making it known that there were several concerns regarding the report and calling for the Commission to re-evaluate its findings. The dollar amount concluded in the report, which would make the tax regime for solar installations in Michigan the most expensive in the Midwest region, had used several assumptions that artificially inflated the capacity rate. The report was the culmination of several months of stakeholder meetings on how the state should approach the assessment of solar personal property taxes.

“In order to achieve the level of solar generation deployment needed to keep energy rates competitive in the state, we need to put into place policies that will help incentivize its development. We fear this valuation report would have the opposite effect. In fact, Michigan could miss out on over $11 billion in private sector investment in cutting edge, high technology solar energy equipment,” said Mike Alaimo, Director of Energy and Environmental Affairs for the Michigan Chamber. “Predictability and uniformity on costs and taxes for solar installations are paramount in ensuring certainty for developers that rely on long-term fixed rates. Creating uncertainty in the marketplace or increasing the costs of power generation will have a negative impact on the grid and increase energy rates for Michigan consumers and businesses.”

Last year, the Michigan Chamber led the charge on  SB 1105 (Vanderwall) and SB 1106 (Daley): bills that would exempt solar energy equipment from personal property tax and impose payment in lieu of tax (PILT) in its place. Working with solar developers, Michigan’s major utilities and the environmental community, the Michigan Chamber led the effort to eliminate a failed personal property tax on solar equipment and apply a simple, flat rate, consistent PILT based on a solar energy facility’s capacity.

Governor Whitmer ultimately vetoed that legislation without explanation.

If you have any questions, please reach out to Mike Alaimo at malaimo@michamber.com.

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