JEFFERSON CITY, Mo. (AP) — As the U.S. government expands incentives for renewable energy, a Missouri Supreme Court decision is moving the state in the opposite direction by halting an energy tax break solar that has been on the books for almost a year. decade.
Legislation signed Tuesday by President Joe Biden injects about $375 billion over a decade into initiatives to combat climate change. These include expanded tax breaks for clean energy production, such as wind and solar power, and for consumers to install solar panels on their property.
Democrats approved the legislation. through a divided Congress last week, around the same time the Missouri Supreme Court struck down a 2013 state law that provided a property tax break for certain solar power systems. The court said the tax exemption was not allowed under the state constitution.
The case involved a private solar farm that supplies power to the City Utilities of Springfield, which serves the third-largest city in Missouri. As a result of the ruling, the company that owns the solar power farm will owe at least $423,360 in property taxes from 2017 to 2020, Greene County Collector Allen Icet said.
It’s unclear how many other solar power sites in Missouri could be affected by the ruling, or exactly how much tax revenue is at stake.
But the ruling could have a chilling effect on solar power development in Missouri, just as the federal government is trying to encourage it.
“Obviously this would be a big problem and a big cost for someone trying to design a large panel system, if they have to pay taxes on the material that generates this free, renewable energy,” said Jon Dolan, executive director of the Association of Solar Power Industries of Missouri.
The federal and state governments have long offered some sort of incentive for solar power. A federal income tax credit for people who install solar panels on their property or make other energy-efficient improvements has been renewed multiple times since 2005. Legislation Biden signed extends the tax credit through 2034.
The new federal law also includes billions of dollars for tax credits to spur investment in clean energy manufacturing facilities and to offset the production costs of things like solar panels, wind turbines and batteries.
In the early 2000s, many states also funded rebates for residents to make energy efficiency improvements. While some of those programs have been eliminated, states have continued to offer other incentives for renewable energy.
Thirty-nine states and the District of Columbia offer some form of property tax exemption for solar energy systems, according to a database maintained by the North Carolina Clean Energy Technology Center at Carolina State University. from North. Some states offer full tax breaks, while others provide relief for only a limited time or only for residential solar systems. Some states have given local officials the authority to exempt property taxes for solar energy systems.
The Missouri court’s ruling “is an outlier” nationally, said Brian Lips, senior manager of policy projects at the North Carolina Clean Energy Technology Center.
“A lot of these incentives are basically on autopilot right now,” Lips said. “So it’s interesting that a state would question something, especially something that’s been around for so long.”
Missouri will not be devoid of solar energy incentives. A new state law Beginning August 28, it will offer a sales tax exemption to businesses that purchase components to build solar energy systems. That law also creates a task force to study solar power policies, particularly focused on those that distribute power from their own solar panels to the power grid.
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