AUSTIN, Texas, Sept. 24, 2014 /PRNewswire-USNewswire/ -- The Alliance for Solar Choice today announced that the filing of an Information Letter Request with the IRS this week is drawing more attention to the negative tax implications of Value of Solar Tariffs (VOSTs). As a result of the action by an Austin homeowner, the IRS will formally review VOSTs and their impact on taxpayers.
Austin implemented a VOST in October of 2012, and that policy is currently the only choice for homeowners to receive compensation for the solar energy they provide to the grid. Austin can reinstate net metering alongside the VOST to address the tax problem. Net metering allows solar customers to get credit on their utility bills at the retail rate for any excess power their rooftop solar installations send back to the grid.
Under a VOST, solar customers cannot use the power generated by their solar systems. Instead, they must sell all the power their solar systems produce to the utility at a price set by the utility (and often reevaluated on an annual basis). Meanwhile, they must continue to purchase all the electricity they need from the utility just like a homeowner without solar. Utilities support VOSTs over the widely effective net metering policy.
According to a 2013 legal memo from top national law firm Skadden, Arps, Slate, Meagher & Flom, VOSTs both jeopardize a homeowner's ability to claim the 30% federal investment tax credit (ITC), and increase homeowners' income taxes.
"VOST schemes expose unassuming homeowners to thousands of dollars in additional taxes," said Bryan Miller, co-Chairman of The Alliance for Solar Choice. "Austin can resolve this tax burden quickly and easily by making the VOST optional and giving homeowners the choice to utilize net metering alongside it."
Through the Information Letter Request, the IRS will make a determination on the impact of VOSTs on income taxes and ITC eligibility. This IRS review will not only impact Austin, but also influence discussions about potential VOSTs in major U.S. solar markets including California and New York. Net metering exists in 43 U.S. states, and polls across the country show overwhelming support for the policy.
About The Alliance for Solar Choice The Alliance for Solar Choice (TASC) leads the rooftop solar advocacy across the country. Founded by the largest rooftop companies in the nation, TASC represents the vast majority of the market. Its members include: Demeter Power, SolarCity, Solar Universe, Sungevity, Sunrun, and Verengo. http://allianceforsolarchoice.com.