Breckenridge adds solar power to sales tax ordinance exemptions
September 24, 2013
Breckenridge Sales Tax Ordinance, updated Aug. 27, 2013: “There shall be exempt from taxation under the provisions of this chapter the following: All sales, storage, of components used in photovoltaic or solar thermal systems and in the production of alternating current electricity from a renewable energy source, including but not limited to wind, as defined in section 3-1-2 of this chapter.”
The old adage claims nothing is certain but death and taxes, but now Summit County residents have one less tax to worry about.
On Aug. 27, the Breckenridge Town Council readopted a sales tax ordinance which includes new exemptions for solar power.
The revised ordinance also exempts garage sales from sales tax, as well as sales for nonprofits that aren't considered a major part of their businesses.
Kim Dykstra-DiLallo, spokeswoman for the town of Breckenridge, said exempting solar will benefit residents looking to invest in alternative energy.
"As a town we feel very passionate about solar," she said. "Looking at the bigger concept of solar arrays and the solar gardens, we felt that should exempt them."
Two solar gardens in Breckenridge will serve Xcel Energy customers across Summit County. The first is the Ullr solar array, located on the Stilson property at 720 Wellington Road. The second array is north of town on the McCain property.
The idea of arrays on town buildings was met with some controversy, Dykstra-DiLallo said. So instead, the town decided to build communal solar gardens.
"In our historic district, there were strict guidelines in place for solar," she said. "We wanted to keep the historic look, so this was the best option, where people can buy into the arrays."
Brian Waldes, financial services manager for Breckenridge, said each solar garden has a total of 500 available kilowatts. He said the average Colorado house can go off the grid — cover the total cost of electricity with solar power — using between six and seven kilowatt hours.
Each of the two solar arrays is close to selling out, Waldes said. There are currently 123 kilowatts sold to residential subscribers, and 277 kilowatts to commercial businesses.
Of the residential kilowatts, 50 were given to low-income families in the area at no cost.
Breckenridge Mayor John Warner and Councilman Mike Dudick both recused themselves from the vote on the ordinance, since they are both interested in investing in the solar arrays for their personal businesses. Dudick owns Breckenridge Grand Vacations, and has made a down payment on an investment in the solar garden, Dykstra-DiLallo said.
The solar gardens are run by Colorado-based company Clean Energy Collective, a private-sector business responsible for the construction of the solar arrays. The company has 19 community gardens already, either complete or under construction in the state.
Waldes said individuals and businesses don't have to go completely off-grid and can purchase any amount of kilowatts to offset energy costs.
However, Xcel mandates people cannot purchase above 120 percent of their average annual consumption, limiting the number of renewable credits.
Every 235-Watt panel costs $870, with a minimum purchase of one panel, Waldes said. Residents and businesses will initially receive a 10 cent per Watt rebate, which will translate to energy bill savings every month.
By exempting the new solar arrays, the town of Breckenridge is missing out on taxes that could total $3.7 million in sales. The ordinance revisions will not garner any new net revenues for the town.
Waldes said Breckenridge wanted to follow the state and county example; both already exempted sales tax on renewable energy.
"We did not want to be the only entity charging sales tax on solar," he said. "It's all part of the town's vision to reduce our carbon footprint."
The solar gardens will be completed by mid-September or early October, when the grids can start running. The McCain property is "fully panelized," Waldes said, and all panels will be up shortly at the Ullr location.
Investors should start seeing savings in November, Waldes said.