Oklahoma To Levy Tax on New Residential Solar And Wind

Despite growing popularity, renewables still face challenges. The list includes such hurdles as high installation costs and intermittency. Taxes will make the costs even higher.

Last month, Oklahoma grabbed headlines and incurred the wrath of renewable-energy champions by adopting legislation that will levy a fee on homeowners who install new distributed generation, including solar and wind power. An overwhelming majority of the state legislature passed SB 1456, and the governor signed it into law soon after.

The motives for this legislation are cloudy. Utilities assert that the fee is needed to help offset the costs of using existing transmission lines to safely deliver power from distributed generation back to the grid, but this argument overlooks the fact that distributed generation actually relieves pressure on the grid at times of peak demand. Also, no plans for infrastructure upgrades were attached to the fee legislation, so it is unclear what sort of improvements, if any, will be made with the additional funds to accommodate the added burden that distributed generation supposedly creates.

The legislation did not specify a fee amount. Instead, it directs state authorities to come up with an appropriate charge. Because the rate has not been set, the impact of the fee is uncertain. 

Some installers are using that uncertainty as a marketing strategy. The fee will only apply to new installations, so installers are encouraging potential customers to purchase and install their systems before it goes into effect.

Oklahoma is not alone among states with policies unfriendly to distributed generation. In 2013, Arizona implemented a monthly fee of $5 on owners of residential solar-power systems.

About the Author

Rick Laezman

Freelance Writer

Rick Laezman is a Los Angeles-based freelance writer who has been covering renewable power for more than 10 years. He may be reached at richardlaezman@msn.com.

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