Skip to content

Senate approves Barrett bills to stop property tax hikes for home solar investments

LANSING, Mich. — The Michigan Senate on Wednesday unanimously approved Sen. Tom Barrett’s legislation to prevent homeowners and small businesses from being hit with higher taxes for going solar.

“Currently, Michigan homeowners who upgrade a boiler in the basement to a natural gas furnace are not penalized for it, but they get hit with higher property taxes if they invest in solar,” said Barrett, R-Charlotte. “This is a matter of fairness and private property rights. Regardless of whether someone is investing in installing an alternative energy system to save on energy costs or to save the environment, their property taxes should not go up as a result.”

Barrett said that as the number of homeowners and businesses installing solar panels to offset their energy usage has increased, local assessors have been inconsistent about whether rooftop solar panels add to the value of a home or building and therefore should be taxed as property improvements.

Senate Bill 47 would clarify the issue by exempting the installation, replacement or repair of an alternative energy system that generates less than 150 kilowatts from increasing the true cash value of a residential property. The installations would be added to the property’s market value at the time of sale.

SB 48 would provide property owners with a personal property tax credit for commercial or industrial use of an alternative energy system that generates less than 150 kilowatts and has a true cash value — in combination with other personal property exemptions — of $80,000 or less.

The bills now head to the House of Representatives for consideration.