CANAAN – Canaan is expected to debate whether or not to exempt wind and solar energy systems that offset on-site power usage from property taxes.
Residents are circulating a petition to create a property tax exemption that would essentially remove qualifying renewable power systems from the assessed value used to calculate property taxes. The exemption would apply to homes and small businesses, but not commercial projects like a solar array farm.
“If you’re taxed, your payback (on your investment) is a lot longer out there mathematically,” said Chris Wadsworth, who has a $12,000 array in his backyard and signed the petition. “The other reason of course is that there is a fairly large community of manufacturers and organizations that produce this stuff and work in this business. We should keep them going. Taxation doesn’t help.”
So far, at least 28 residents have signed on, which exceeds the 25 signatures needed to get the article on the warrant for Town Meeting in March. In the meantime, the Selectboard will vote on whether to recommend the warrant article.
Canaan does not fully exempt home solar panels from property taxes. That sets it apart from many of its Upper Valley neighbors, including Enfield, Lyme and Hanover. Vermont fully exempts solar photovoltaic systems up to 50 kW from the statewide education property tax.
This warrant article would not be the first time Canaan has dealt with renewable energy taxation. Homeowners with solar arrays saw their taxes climb as the town went through a reassessment over the last two years, and in 2020, residents brought a similar warrant article that also included wood-powered energy systems up at Town Meeting. All three members of the Selectboard voted not to recommend the warrant article. It failed to pass, with 195 residents voting in favor and 239 against.
“The feeling was, the decision may help with electricity, but it would also add to the retail value, so it’s no different than if you were to add another garage or bathroom,” said Samson, who was summarizing the majority view at the time.
“Alternate energy is a big issue for every community,” he added. “The community can work as a group to make sure that they are more resilient if they have alternate sources of energy. … We have a committee looking for alternate energy sources for the community. It’s up to the voters to see if it is worth doing this particular exemption.”
If approved, the exemption would cost the town about $12,000 a year in tax revenues and the town would have to raise the tax rate to cover the loss, he said. A total of 24 homes and businesses have solar panels in Canaan. The town already has a $50 exemption for solar energy systems, which four households took advantage of in 2020. But with several installations costing over $15,000, a credit of $50 “really isn’t going anywhere,” Samson said.
Supporters of the exemption argue that solar and wind systems promote a locally sustainable power supply, which has communitywide benefits and aligns with the town’s energy goals. Joanna Carr and her husband, John, installed panels in 2015. The panels added $15,000 to their last property assessment, significantly raising their annual taxes.
“My husband is 79 and I’m 77. We wondered if we would even see a payback in our lifetime, but we felt we have always felt very strongly about the environment. … We just felt that it was the right thing to do,” Carr said, adding that she worries taxing wind and solar energy systems may discourage other homeowners from making the same choice.
Canaan’s three Selectboard members could not be reached for comment. In 2020, Chair Scott Borthwick and David McAlister both voted not to recommend the exemption at Town Meeting. Dan Collins was not on the Selectboard at the time.
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