Montgomery County passes tax exemption for community solar

In May, Montgomery County enacted a law that puts community solar on a more level playing field with rooftop solar. Bill 9-17 exempts the energy generated by community solar facilities from the county’s fuel-energy tax. Councilmember George Leventhal was the bill’s lead sponsor and it received broad support from the council.

The fuel-energy tax applies to “every person transmitting, distributing, manufacturing, producing, or supplying electricity, gas, steam, coal, fuel oil, or liquefied petroleum gas in the County” but makes exceptions for renewable energy. Previously, this tax exempted net energy metered systems like rooftop and ground-based solar to offset some or all of the energy used by a property on site.

Community solar implements “virtual net energy metering” (off site) to provide the same effect to subscribers as if the solar were on their property. The shared array is located elsewhere but enables renters, homeowners with shady roofs, and others to subscribe to solar electricity and see corresponding credits applied to their utility bill.

Because of the previous limitation to on-site renewable energy, the fuel-tax would have applied to community solar-generated energy, increasing cost of providing that energy to the consumer. The act, which takes effect July 1, 2018, fixes this issue by also exempting virtual net energy metering, like the community solar program, from the tax.

The result is a more level playing field for all county residents who want to participate in the solar economy. If residents install solar on their home, the fuel-energy tax does not apply to them. If they decide to go solar by subscribing to community shared solar instead, they will now also be exempted from the tax.