LANSING — House Democratic Floor Leader Yousef Rabhi (D-Ann Arbor) introduced legislation this week to level the playing field for those pursuing small-scale renewable energy generation. House Bills 4465 and 4466 would prevent tax increases on property owners who install alternative energy systems up to 150 kilowatts of generating capacity. 

“Renewable energy is the way forward for Michigan to secure sustainable, affordable energy for all our residents,” Rep. Rabhi said. “We should be doing all we can to support those working to protect our environment, and build a clean energy future for Michigan. This legislation helps to create green energy jobs and ensure a healthier future for all of us.” 

Versions of HBs 4465 and 4466 passed the Legislature with overwhelming bipartisan support late last year, but faced vetoes from Gov. Snyder. Under the bills, home renewable energy systems would not add to the taxable value of a property until it is sold. The legislation also clarifies that home renewable energy systems are not subject to personal property tax, which usually applies only to industrial equipment.

A 2018 ruling from the State Tax Commission specified that residential solar panels are to be considered real property and not personal property, which allows assessors to raise a property’s taxable value when homeowners add solar panels. The Ann Arbor city assessor had already been raising taxable values due to solar panels, and other jurisdictions are likely to follow suit in the wake of the ruling. The additional taxes present significant obstacles for people moving to renewable energy sources like home solar.