Could Your Solar Property Qualify for a Tax Exemption?

Many New Hampshire cities and towns offer a full or partial exemption from property taxes for the cost or value of solar and other renewable energy equipment installed on your home or business.  Municipalities are authorized by statutes originally enacted in 1975, RSA 72:61 and RSA 72:62, to exempt the cost of solar energy systems from local property taxes provided the municipality follows the process for adopting the exemption.  Many municipalities offer a partial or full tax exemption.  The New Hampshire Department of Revenue Administration (DRA) keeps a list of communities that offer this special tax incentive:    According to the DRA website, as of June 2018,  135 New Hampshire municipalities (out of a total of 221 towns and 13 cities in the state) provide the exemption.  Many are for 100% of the assessed value of the equipment, some are for 50% of the assessed value, some equal the cost, or replacement cost, of the equipment, and some include the installation cost.  Some have a cap on the tax exemption, anywhere from $5,000 (Hollis, Hopkinton, Newbury, Washington) up to $50,000 (Plainfield, Springfield).  Many that have a cap are somewhere in between: $10,000 (Jaffrey, Milford); $20,000 (Stratham, Sugar Hill, Unity); $25,000 (New Ipswich, Portsmouth); $35,000 (Warner).

The exemption must be adopted by warrant article, ordinance, resolution, or by placing a question on the official ballot for a municipal election, depending on the form of government in a town, i.e. whether the town has adopted a charter under RSA 49-D.   Some of the exemptions were adopted as far back as 1976 (Holderness, Hopkinton), 1977 (Carroll, Columbia, Northwood, Surry, Swanzey) and 1978 (Alton, Centre Harbor and Dublin).   Some have been adopted in more recent years: 2016 (Allenstwon, Bow, Danville, Epsom, Francestown, Lee, Londonderry, Lyman, Madison, Milford, Nashua, Nelson, Pittsfield, Plaistow, Salisbury, South Hampton, Whitfield, Wilton); 2017 (Henniker, Keene, New Ipswich, Newton, Richmond, Shelburne, Stoddard, Sutton, Wakefield).  According to the DRA website, Berlin, Concord, Derry, Rochester, Hudson, Bedford, Exeter and Portsmouth have all adopted the exemption in some form, while Manchester, Dover, Salem, Hanover, Claremont and Merrimack have not.

“Solar energy system” is defined in the law as “a system which utilizes solar energy to heat or cool the interior of a building or to heat water for use in a building and which includes one or more collectors and a storage container.”  It also includes “a system which provides electricity for a building by the use of photovoltaic panels.”

The individual or business entity seeking the exemption must file an application, under penalties of perjury, with the selectmen or assessors, by April 15 on a form provided by the DRA and must show that this person is the  lawful owner of the property and was qualified upon April 1 of the year in which the exemption or tax credit is first claimed.  By July 1 the selectmen or assessors must send a written decision to the taxpayer who requested the exemption.  A person who is denied the exemption may appeal by September 1 to the board of tax and land appeals or the superior court.

Similar exemptions are also authorized by law for wind-powered energy systems and wood heating energy systems.

About the Authors: Douglas Patch and Tony Sayess

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