Bruce Ritchie: Is there a fair way to tax sunshine?

Can we find a way to tax the sunshine?

That seemed to be the underlying issue recently when state analysts were trying to determine the potential cost of a proposed constitutional amendment that promotes solar energy.

Representatives of utilities, cities and counties warned the analysts that increased use of solar energy could mean the loss of millions of dollars per year in state and local tax revenues.

The analysts on a state panel called the Financial Impact Estimating Conference must come up with a cost estimate for the proposed solar amendment before it goes on the general ballot in 2016.

Utilities in Florida in 2014 together collected about $2.9 billion in state and local taxes, fee and revenues, said Jerry McDaniel, representing the state’s four largest investor-owned utilities.

So each 1 percent in power sales lost to solar would cost $29 million for state and local governments, McDaniel said.

When a solar panel on a home creates electricity that powers a refrigerator, no monetary transaction occurs. So government isn’t there to collect a tax.

But, as one analyst pointed out, government also isn’t taxing the electricity produced when someone cranks up their backyard generator during a blackout.

No one mentioned this, but it occurred to me: What about the person who buys a load of firewood from someone in a truck by the side of a road?

Or they chop up a tree that falls down in their back yard? How come they aren’t paying an energy tax?

Susan Glickman, Florida director of the Southern Alliance for Clean Energy, said using solar energy to reduce your electric bill is no different than installing energy-saving LED lights in your kitchen. It still represents less electricity purchased from utilities and less tax collected for state and local governments.

Her remarks and McDaniels’ followed a larger discussion about how solar customers may not be paying their fair share for power plants and distribution lines.

That also gets into larger issues such as the costs of pollution from burning coal versus “distributed” forms of energy such as solar and wind power.

“We need to deal with this in sort of a fair, comprehensive way and not pick out solar customers,” Glickman said. “That really was the logic behind the drafting of this amendment so that the utilities couldn’t come in and slap erroneous costs.”

The same argument goes with gas taxes, which help pay for roads. When hybrid and electric vehicles started being sold a few years ago, suddenly the road-building advocates argued those drivers weren’t paying their fair share either.

That’s probably true.

But energy conservation is good for America – that idea was drilled into my head during the 1970s. I remember too vividly the gas lines after OPEC cut off oil shipments to punish us for supporting Israel during its wars.

Technology is changing, whether we like it or not.

We may need to refigure our tax system from time to time to make sure everyone pays their fair share. But that shouldn’t drive our energy policy.

Bruce Ritchie (@bruceritchie) covers environment and growth management issues in Tallahassee for Floridapolitics.com. He also is editor of Floridaenvironments.com. Column courtesy of Context Florida.

 

Bruce Ritchie



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