Connecticut solar companies and cities begin to settle property tax dispute


Via Energy Information Network: Connecticut cities are negotiating settlements with solar developers over dozens of disputed property assessments on residential solar installations. Solar companies filed about 200 lawsuits in recent years, challenging local assessors’ interpretation of a state law they say was intended to exempt residential solar installations from property taxes. However, ambiguous language has led some cities to adopt tax systems that feed electricity into the grid or are owned by third parties.

At least half a dozen of the roughly 20 cities facing such lawsuits have proposed pending settlements, according to state court records. And the city of Stratford has resolved all of its cases, according to Christopher Tymniak, the city’s chief administrative officer. Although the details of the regulations have not yet been released in most cases, in those that have been released, the cities agree not to tax the systems in the future. It is not known if they refund the money already paid by the developers.

“All cities and all plaintiffs have been referred to mediation with Judge Ron Kowalski,” said Benjamin Proto, an attorney representing multiple cities. “He’s literally taking these towns city by city and trying to come to terms with each one.”

Cities and solar developers have been in a legal stalemate for several years over how to interpret a state status which grants a property tax exemption to renewable energy sources that generate electricity for “private residential use”.

As of 2017, a small minority of assessors began to interpret this to mean that only solar panels owned by an owner and/or generating electricity solely for the property are exempt, while those feeding into the grid or belong to a third party are not.

They began assessing property taxes on solar panel systems in which the owner relied on leases or power purchase agreements – the vast majority of systems in Connecticut. In some cases, facilities were assessed after having been previously exempted.

Solar companies began filing lawsuits, arguing that the law was meant to apply equally to leased and net-metered systems. This post was supported by Senate Majority Leader Bob Duff, who chaired the Energy and Technology Committee at the time the exemption was passed.

Efforts to resolve the problem through a legislative solution have so far failed. Lawmakers are trying a new approach this session.

Previous bills expressly exempted all residential signs in the future, while allowing cities to keep the tax revenue they had already collected on those signs. A bill – HB 6106 — approved last month by the Planning and Development Commission clarifies that the exemption applies to solar installations participating in net metering and/or owned by a third party.

“I think the bill has a good chance of getting out of the House because it just says that in the future you can’t municipally tax solar panels,” said Rep. Joseph P. Gresko, one of the sponsors. “Let the rest play out in court. If cities want to settle, they can try to settle.

Gresko’s town of Stratford is among those doing just that. In a settlement, Stratford and Castello Solar, I agree that the company’s solar generating systems will be tax-exempt with respect to the 2020 Big List – the annual list of all taxable and tax-exempt properties tax – and in the future, unless the law changes.

The municipality also undertakes not to “interfere” with the passage of HB 6106.

That leaves the question of disputed tax payments made on Castello Solar Systems rated on the 2017, ’18 and ’19 major lists. The court filing indicates that the parties entered into a separate, confidential written agreement on how to handle these payments. Tymniak declined to say whether the city had returned any money, noting that other cities were still in negotiations.

“We have developed an aggressive plan to settle all of our cases and remove uncertainty from our books,” Tymniak said. “The longer you go on, the greater the responsibility on both sides. We are still waiting for the state to step in and clarify the language because there is a gray area there.

Somers, Fairfield, Greenwich, Killingly and Ansonia have negotiated proposed settlements with various developers that are awaiting approval from each city’s board before being formally filed with the court.

Adam Stern, the head of CT Solar Leasing, one of the suing companies, said it reached “satisfactory” settlements. But he said he remained frustrated with the time and expense of a process that he said should never have taken place given that “it’s pretty clear the exemption is there”.

“It’s very upsetting that many cities continue to spend taxpayer dollars on litigation, and they’re spending multiples more than they’ll ever get,” Stern said.

His firm has submitted a public records request to the City of Cromwell requesting invoices for legal fees incurred in his case thus far. Copies of those invoices show a total of $17,719 billed in March. That sum appears to be a “misuse of taxpayer funds,” Stern said, given that the property tax allegedly owed on solar panels owned by his company is $1,569 a year, less than $6,000 at this point. day.

Marianne Sylvester, Cromwell’s chief financial officer, confirmed that she had provided the legal invoices in response to the request for documents.

Connecticut is one of 33 states that exempt solar PV systems from property taxes, according to testimony submitted in support of HB 6106 by Meghan Nutting, executive vice president of policy and communications for Sunnova Energy Corp.

She said the widespread policy reflects “a common understanding” that “such tax exemptions encourage and advance the deployment of renewable energy systems.”

Author: Lisa Prevost is a longtime journalist based in Connecticut. She writes regularly on housing, development and business for The New York Times. His work has also appeared in the Boston Globe,, Next City and many other publications. She is the author of “Snob Zones: Fear, Prejudice and Real Estate”. Originally from New England, Lisa covers Connecticut and Rhode Island.

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