Bill Mandating Exclusion of Rooftop Solar from Real Property Assessments Fails on House Floor

February 15, 2022

A bill mandating that rooftop solar installations be exempt from local taxation failed on the House of Delegates floor last Friday. HB 1185 (Bourne), which would have mandated that any rooftop or ground-mounted solar installations, serving just the energy needs of the property to which they are located (i.e., behind the meter), shall be a separate class of property and entirely exempt from local real estate taxes, failed to pass. Although the bill passed in House Finance by a vote of 18-4, Delegate Rob Bloxom spoke in opposition noting “The locality can do this today if they chose to … We are giving away someone else’s money …We need to leave this to the locality and not deal with their revenue stream.”

A similar bill, SB 686 (Mason), passed the Senate and will be headed to the House upon crossover.

KEY POINTS

  • Local governments under current law can exempt rooftop and ground-mounted solar, as improvements to real property, wholly or partially from local real estate tax.
  • Any locality that does not currently provide a full tax exemption to such improvements to real property will see a reduction in revenue.
  • When making sound fiscal policy regarding available revenue to meet expenditures in service to their community, VACo supports maintaining a locality’s flexibility to decide if such improvements should be wholly or partially exempt from local taxation.

VACo Contact: Joe Lerch, AICP

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