Committee hears bill to protect nonprofits from property taxes tied to solar installations amid concerns over breadth of exemption

The Committee on Business and Economic Development heard testimony March 19, 2025, on Bill B26-55, the Nonprofit Solar Tax Exemption Amendment Act of 2025, a measure that would amend D.C. law to prevent property tax assessments on tax-exempt buildings and grounds used for solar energy generation, energy storage, energy-management activities and electric-vehicle charging. The bill would also, as the chair stated during the hearing, not permit a nonprofit to sell excess power generated by the solar facilities.

Witnesses from charter schools, houses of worship, solar industry groups and solar installers described a recent Office of Tax and Revenue (OTR) determination that treated a power-purchase-agreement (PPA) installation at a nonprofit school as a taxable commercial lease and produced a multi‑year tax bill. They said the ruling has frozen planned projects, threatened existing systems and unfairly penalized organizations that installed solar to lower operating costs.

Simon Rodberg, Executive Director of Lee Montessori Public Charter Schools, said Lee Montessori "has saved the school approximately $56,000 in energy expenses" since January 2023, but for fiscal year 2024 the school received a $34,000 property tax bill from OTR ‘‘solely because we have solar panels.’’ Rodberg said the burden was expected to rise to more than $60,000 in FY 2025 because of reassessment tied to a building addition. He told the committee that the panels were installed through a PPA, a standard financing mechanism that allowed the school to install panels without significant upfront cost; OTR concluded the PPA amounted to a commercial lease allocating taxable square footage.

Reverend William T. Young IV of Covenant Baptist United Church of Christ said his congregation installed panels under a PPA in 2018 and described the installations as a mission-driven effort to lower expenses and expand clean-energy access in Ward 8. He said the OTR ruling is "wrong because it misunderstands how our organizations use PPAs" and warned that uncertainty will deter nonprofits, churches and charter schools from going solar.

Solar industry representatives and advocates urged a legislative fix. Corey Ramsden of Solar United Neighbors described PPAs as "a critical financing mechanism" that enables nonprofits to install solar with no upfront capital and directed savings toward mission work. Nicole Rintz, D.C. Committee Chair of Chesapeake Solar and Storage (CHESS), said more than 100 tax-exempt institutions have installed solar since 2018 and that the OTR decision threatens existing systems and future projects; she urged the committee to clarify law to protect nonprofit hosts while allowing the city to meet its clean-energy goals.

By contrast, resident Caroline Petty expressed concern that the bill as drafted might be overly broad and could "incentivize tax exempt entities to lease or allow use of their buildings and grounds to for profit entities for commercial sales unrelated to the mission of the tax exempt entities." She urged tighter guardrails and narrower drafting to avoid opening the door to commercial use of tax-exempt property.

OCFO Assistant General Counsel Basil Fiscina testified that the bill as written would protect exempt property from losing its tax exemption when used for solar-related activities, but that the scope and trade-offs are for the council to decide: "we would basically view that as fencing off from taxability any solar type use of a property," he said. He noted that existing code provisions that protect tax-exempt properties engaged in certain environmental programs (for example, stormwater retention credit installations) work in a similar way.

Committee members questioned witnesses about PPAs, roof leases, net energy metering and whether owners ever sell power to the grid; witnesses said the installations primarily offset on-site usage and that their organizations had not profited from selling excess energy. The committee chair emphasized an intention to prohibit nonprofit property owners from using this exemption to sell excess power commercially, and members said they would work on language to address concerns about energy storage, commercial leasing and the statute's scope.

No vote was taken. The committee invited written testimony through March 28, 2025 and signaled intent to work with OCFO and industry stakeholders to refine bill language to preserve the tax-exempt status of bona fide nonprofit energy-hosting arrangements while preventing unintended commercial uses of tax-exempt property.