MERRIMACK — Following an outcry from local residents, the town council is studying whether solar units on local properties should be exempt from taxes, an issue that other towns in the Granite State have wrestled with as the systems become more widespread.
Several communities in New Hampshire offer an exemption for solar energy systems. However, town officials decided two years ago that it would not place an item on the town warrant that could have adopted property tax exemptions for households with solar panel systems. Now, with solar becoming more popular, the council is revisiting that issue.
“It is a fixture to the property and has to be considered,” Assessor Loren Martin told town officials last week.
The New Hampshire Department of Revenue Administration has stressed the importance of assessing solar statewide, Martin said.
Still, Martin said, about half of the New Hampshire communities that Avitar Associates of New England Inc. assesses are utilizing solar exemptions — some of them full exemptions and some of them partial exemptions.
“I have heard from both sides of the fence on it … it is really dependent on the community. There is kind of a mixed bag of emotion on that,” she said.
There are currently 113 properties in Merrimack that have solar systems in place, which includes four commercial properties. On average, the cost of a solar panel is about $1,100, according to Martin, who said she currently assesses each solar panel at $600.
Barbara Healey, town councilor, said the U.S. Department of Energy and the Appraisal Institute have both determined that solar panels increase the value of a home.
“We have been discussing this, I don’t know, probably five years now,” Martin said of the solar tax issue.
Martin did not provide an opinion on whether town officials should implement tax exemptions for solar units.
Patrick Del Duco has been designing, installing and maintaining commercial solar for several years. According to Del Duco, some communities that offer exemptions for solar energy systems include Concord, Manchester, Bedford, Amherst, Milford, Londonderry and Hudson.
In Nashua, a homeowner with a $200,000 home who installs a solar array on the home for about $30,000 has the entire system fully exempt from taxes and the home value remains at $200,000, Del Duco explained.
“This is the best-case scenario and what most towns are doing to encourage solar installations,” Del Duco said in a statement.
Without some type of exemption in place, he said, a homeowner with a new solar array may experience a higher assessed value, meaning the money he or she is saving on energy costs is now being used to pay for higher taxes.
“The reality is that the solar array, as an asset, is only worth the value of your electrical savings,” he said in a statement, explaining that if a solar array costs $30,000 to install and saves $1,080 per year, then the annual tax value should be $1,080. Using this policy, he said a resident in Merrimack would pay about an extra $25 a year in increased assessed value, which he said is reasonable and would not prevent the installation of solar in the community.
“It is an interesting issue,” said Tom Koenig, town councilor, who suggested that the council debate the issue further at an upcoming town council retreat.