Leasing the sun
BOMA Greater Phoenix has been working toward the efficiency and sustainability of its members and other commercial buildings for many years.
Its Kilowatt Krackdown energy benchmarking and tuning program has engaged almost 500 commercial buildings in the Valley of the Sun since 2009 and has helped Phoenix to grow from No. 23 on the list of Energy Star Certified buildings to No. 12 last year. That’s one of the reasons BOMA is so concerned to see the decision by the Arizona Department of Revenue (DOR) to tax leased rooftop solar systems.
According to the Department of Revenue’s own figures, the proposed tax on leasing systems would more than offset the utility savings for homeowners for at least the first several years of the lease and cost commercial property owners a large chunk of anticipated savings.
BOMA Phoenix’s membership and our Advocacy Committee actively supported a bill introduced in the state Senate last session to make leased solar energy devices or systems designed to serve on site electricity needs considered to have no value, and to add no value to the property for tax purposes. Unfortunately, this bill did not advance.
The DOR has recently begun sending valuation notices to Arizona companies that are involved in these solar leases. Two of the companies are now challenging the DOR in court. While BOMA hopes the lawsuit progresses successfully and the state reverses its plan to tax these systems, it is also encouraging legislators to revisit this issue in the next session.
Making efficient use of the abundant Valley sunlight is the right thing to do from a business and sustainability standpoint.