New Hampshire Republicans want to raise taxes on homes with solar
New Hampshire Republicans are trying to eliminate a 50-year-old property tax exemption for households and businesses using solar energy, saying the policy forces residents without clean energy systems to unwittingly subsidize those who do. Supporters of the exemption, however, say the argument is misleading, insulting and at odds with New Hampshire’s tradition of letting communities shape their own local governments.
The debate centers on a bill proposed this month in the New Hampshire House by Republican Rep. Len Turcotte and several cosponsors from his party. The measure would repeal a law established in 1975 that allows cities and towns to exempt owners of buildings equipped with solar energy from paying taxes on the value their solar systems add to their property. By 2024, 153 municipalities in the state, or about two-thirds, had adopted this exemption, one of the only incentives offered to support residential solar energy in the state.
The exemption means homeowners without solar must pay more property taxes to make up for money not collected from the “extreme minority” who own solar panels, Turcotte said while introducing his bill at a House Science, Technology and Energy Committee hearing last week. This “redistribution” of the tax burden is unfair, he declared.
The solar property tax exemption is a fairly common policy: Nationally, 36 states offer some version. While lawmakers in many states have targeted pro-solar policies like net metering, property tax exemptions have so far avoided similar attacks. New Hampshire could therefore serve as a testing ground to determine whether this approach can find success.
Illinois Families Go Electric – For Free
New Hampshire has no sales or income tax and relies heavily on local property taxes for revenue; its prices are among the highest in the country. This makes the evolution of property tax policy a particularly sensitive subject. The solar exemption bill causes Republicans, who are generally opposed to the tax, to strike a balance between defending what they say is fairness for all and promoting a policy that will inevitably raise taxes for some.
The state allows 15 other property tax exemptions, including for elderly residents, veterans and people with disabilities, but Turcotte’s bill only targets the one for solar energy.
The exemption is a “local option policy,” meaning cities and towns must opt into it through a vote in each municipality. Turcotte, however, doubts that the average resident realizes that they are committing to paying more of their own taxes.
“They see it as a feel-good measure,” he said. “Do they really understand? I don’t think they do.”
After Turcotte introduced his bill, the other speakers — about a dozen clean energy advocates, lawmakers, business leaders and local solar owners — unanimously opposed his proposal.
New England’s last coal plant closes years ahead of schedule
Eliminating the exemption would be an unfair rule change after homeowners invested in solar systems knowing they would receive a tax break, many argued. Businesses using solar energy could face a “significant tax increase,” said Natch Greyes, vice president of public policy for the Business and Industry Association of New Hampshire. The change could cost solar owners hundreds of dollars a year while barely reducing the property tax rate for everyone else, others said.
In the town of Hudson, for example, $2.2 million in property value is not taxed because of the exemption, out of a tax base of $5.1 billion, its chief assessor, James Michaud, testified. Removing the exemption would have virtually no effect on the tax rate, he said.
“It’s almost incalculable how small it is,” he said.
The small tax transfer created by the exemption is worth it, others argued, arguing that it provides an incentive for the public good: More solar power means fewer greenhouse gas emissions and less load on the grid. Turcotte countered that these broader benefits of solar energy — many of which have been well documented — are “subjective.”
The question of local control also featured prominently in the testimony. In New Hampshire, whose motto is “Live Free or Die,” the right of individual towns to decide their own rules and regulations has long been a point of pride. Repealing the exemption would overturn the decisions made by voters. Turcotte’s assertion that residents didn’t understand what they were getting themselves into is not only condescending, but also simply false, several witnesses said.
“Essentially, with this bill, you are substituting your judgment about what is appropriate in local taxation for that of town meetings and city councils across the state,” Rep. Ned Raynolds, a Democrat, said in questioning Turcotte.
The bill now awaits a vote in committee before it can be voted on in the plenary chamber. It would then be sent to the Senate. Republicans control both houses of the state Legislature and the governor’s office.
But opponents of the bill hope lawmakers will heed their arguments and give weight to the mass of voters who approved the exemption statewide.
“That’s why two-thirds of the towns have adopted it: they see that it’s a good thing,” testified David Trumble, solar energy owner in the town of Weare. “Solar energy is a good thing.”
