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Merrimack homeowners taxed on solar systems

By George Pelletier - For The Telegraph | Mar 28, 2019

The town of Merrimack is uniquely taxing home owners who have installed solar panels on their homes.

While most cities in New Hampshire exempt solar systems (known as an “array”) as renewable energy, Nashua included, Merrimack taxes home owners who have installed solar panels, or modules as they are called, to the tune of $600 per module.

The only other town in New Hampshire that also does not offer an exemption is Bow.

Bedford resident Patrick del Duco, who has years of experiences in designing, installing and maintaining solar systems, called Merrimack’s situation “unique.”

“The interesting thing I consider is that the solar modules themselves aren’t your asset,” he said. “Your value is the energy that they produce and the saving that they make. This has come up before in Merrimack where, another resident’s solar module leasing company neglected to take the taxing into account and it ended up costing him, from what I understand, more than he was saving.”

In most states across the country, there is an exemption for home owners who elect to use solar modules in an effort to reduce the reliance on traditional power sources and help the environment.

In 2017, the Merrimack Town Council voted against such an exemption.

Councilor Tom Koenig said at the time that while he understands solar modules as being good for the environment, he took issue with aligning the cost of taxes onto Merrimack property owners who did not install solar systems, maintaining that installations constitute an improvement to peoples’ homes. Tonight, the Merrimack Town Council can expect a healthy portion of the 97 Merrimack homeowners to attend a city meeting.

Del Duco said he wasn’t sure what conclusions the meeting would draw.

“People that have a solar system are not happy at all with the way the Merrimack is uniquely handing it,” he said. “In the case of opponents, they’re worried that eliminating the tax on solar modules will then become a bigger burden for everybody else in town.”

Of the 97 Merrimack home owners who have solar systems, the impact was $63,469 in taxes. If you were to spread that over 10,078 homes in Merrimack and divide that amount, it would cost the rest of the homeowners $6 per year to allow solar to be accepted.

“The problem with people that don’t have solar, is that since we have tax on it now, presumably if we made them exempt, we would have to figure out how to get that money elsewhere,” del Duco surmises.

“It’s actually killing Merrimack’s solar,” he added. “People are saying ‘why would I do this? I’m just going to see most of my savings go to taxes and the return on my investment is going to drag on many more years than it should.'”

Facebook forums on the Merrimack issue have lit like a solar-powered Christmas tree, as the entire list of the 97 home owners being taxed for their solar endeavors was all sent a letter, informing them of tonight’s council meeting.

In part, the letter stated the following: “As you know, whether you lease or own your panels, your house value is increased by the pre-determined cost of your entire solar system every year. This is causing many of us solar owners to actually pay more in tax then we save on our rented panels. The State of NH has decided that in order to encourage solar, municipalities can exempt solar panels from the assessment of a property’s value. Of all the larger cities/towns and all of southern New Hampshire, Merrimack is the only place where we are penalized on our taxes for having solar.”

Del Duco also mentioned that, “other towns have figured it out. Hollis will pay you if you if you have solar. That’ what makes Merrimack so unusual.”

The Facebook forum also has seen posts from opponents.

“One person said, ‘hey wait a minute – I don’t want to be subsidizing the fact that you’re going to get away without paying a tax on your solar,'” he relayed. “‘If you were to buy an expensive car, there’s a tax on that car. If you’re going to put unsightly solar on your house, you should be taxed for that. I don’t want to be covering the tax that you’re going to create.'”

The aesthetic issue, according to del Duco, is sometimes an issue.

“It seems that people who don’t have solar are annoyed by the people who do,” he suggested.

Del Duco also said sometimes it’s just a matter of a bad installation job.

“I work in solar and we deal with the problem constantly,” he said. “This aesthetics issue happens. On an occasion somebody can do a terrible job on an installation that can look very bad. But that usually just turns out to be an excuse that somebody throws out there to cover their real issues with because they don’t want to pay more.”

Del Duco said that some residents probably think that solar modules are generating a lot more revenue for the town than it is. That’s a $6 implication without it, but it’s a $600 implication for those who do have solar modules.

“If you pay $35,000 for an array, $15,000 is for engineering and installation Twenty-thousand is the cost of the materials.”

There are some installers who tax 100 percent on the install.

“That’s very uncommon,” said del Duco. “There are some that tax on the cost of materials. The installation is not part of the value. That’s uncommon. The norm is to be exempt.”

The harsh reality, say solar proponents, is that by taxing people who go solar in Merrimack, others considering solar as an option simply won’t install it.

“Then you have such a low rate of installation- because of the tax happening, that the town of Merrimack is not generating revenue from solar anyway,” del Duco said.

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