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Carbondale environmental board tables proposal to waive use tax on residential solar pending staff report
Summary
Board members discussed drafting a rule to exempt up to $35,000 of residential solar components from the town's 3.5% use tax but agreed to table the measure for additional data and a staff proposal at the May meeting.
A proposal to exempt a portion of residential solar installation costs from Carbondale's 3.5% use tax was discussed and tabled for further study.
A board member proposed instructing staff to draft rules that would exempt the first $35,000 of solar‑related construction materials on existing homes from the town's 3.5% use tax, a step intended to align incentives across new construction and retrofit projects. Proponents argued the town currently waives the tax on solar components when panels are installed as part of required energy‑efficiency measures on new construction, while retrofits on existing homes still incur the levy.
The board reviewed preliminary building‑department data cited in the meeting showing five solar permit applications so far in 2026 (as of March 20): four had been approved, three of those were for new construction, and the transcript notes one existing project incurred about $2,000 in use tax charges. Board members asked staff to pull a full year of data, consult municipal code and the finance department to estimate revenue impacts, and return with an implementable proposal.
Board members also flagged permitting and inspection tradeoffs: while the use‑tax waiver is a fiscal decision, permitting practices (for example, structural check and installation inspection) remain important to ensure rooftop safety.
The board voted to table the measure until the May meeting to allow staff to compile a more complete set of data and prepare draft language, possibly broadened to include other electrification measures such as heat pumps.
Next steps: A board member volunteered to consult with the building department contact (Aaron) and the finance director (Ola) and bring comparative 2025 data and draft proposal language to the next meeting.
