When Steve Johnson started Nashville-based LightWave Solar in 2006, he was something of a pioneer. The first strictly solar company in Tennessee, he was taking a risk on an emerging industry with practically no history in the state. But with a background in electrical construction and a flagging market, he made the leap.

“It was slow at first but it has been gathering steam ever since,” he says.

More than just gathering steam, solar has seen incredible growth since LightWave’s entry into the market. Johnson’s business is now one of 180 solar companies in the state. And his now-34 employee team is among the more than 6,000 solar manufacturing and installation jobs that have cropped up in the same time period. And according to the Tennessee Solar Institute, since 2008, Tennessee has gone from less than a 10th of a megawatt of solar photovoltaic capacity to more than 27 megawatts of solar power installed.

The industry has been a haven for people making career switches from industries such as construction. Shoals Technologies Group in Portland, for example, which used to supply auto parts to Bosch and Delphi, now has 100 percent of its business tied to solar power. About 400 local jobs were created when the company opened its plant in December 2008.

And with help from $1.25 million in grant money from TSI, Shoals purchased a second plant and hopes to create another 400 jobs in the next few years. And many say the growth for Tennessee could be endless in a $137 billion global solar market.

Growth in usage in the state has also been spurred by programs such as TVA’s Generation Partners, which provides technical support and incentives for the installation of renewable generation systems, like solar. And subscribers to the program have the benefit of lower monthly energy bills, thanks to the revenue they receive from the sale of the green power.

But Johnson and others in the industry say solar is now under attack in the Tennessee Legislature. Senate Bill 3296, sponsored by Sen. McNally (R-Oak Ridge), and House Bill 3520, sponsored by Rep. David Hawk (R-Greeneville), would increase the appraised value of solar property for purposes of property taxation from 0.5 percent to 33 percent of the original cost.

Bill confusion

Behind the bill is former Tennessee House Majority Leader Jason Mumpower, now chief of staff to Comptroller Justin Wilson. He says the bill is not an attack but an attempt to fix a tax break set in 2010 that the Attorney General has ruled unconstitutional.

“The Legislature at the end of session considers a bill that comes from the state department of revenue called the Technical Corrections Bill, which is a bill full of exactly that, technical corrections to state taxes,” Mumpower explains

He says that tucked deep into that bill in 2010 was a provision that was overlooked that dealt with property taxes. He says at the time there was a certain type of solar production equipment classified as pollution control equipment.

“That is a standard that has long been held unconstitutional by the attorney general,” he says. Mumpower was the Republican House Majority leader at the time.

Johnson is confused as to why solar would not be considered pollution control equipment.

“You want to destroy an industry over a technical correction?” he asks “Why do you need a technical correction? It is pollution protection equipment. They also have gas pipelines and refineries and quarries and other types of businesses in the same category. So if the gas pipeline is pollution prevention equipment then solar would be. And gas pipelines have emissions.”

He is also confused because the bill seems to affect every person who has a solar system installed on their home or business, despite Mumpower’s claims to the contrary.

“The only people affected by this are people who have applied to the Tennessee Department of Environment and Conservation and receive certification as a green energy producer,” Mumpower says. “People who dedicate themselves to producing solar energy, and 100 percent of it must be sold for consumption off premises. So the person out there who has a solar panel on their roof or a business, those aren’t the kind of people who are going to be affected by this, and people have become confused.”

Johnson, who is also the vice president of the Tennessee Solar Industry Association, says Mumpower is the one who is confused since anyone who has solar installed sells 100 percent of their energy to a local provider and receives a credit.

But Kelsie Jones, executive secretary to the State Board of Equalization, says those private homeowners probably won’t be affected. But he isn’t sure.

“They would likely not be affected because that equipment would likely be considered tangible personal property not used in a business and therefore not assessable for property taxes,” Jones says.

But the confusion alone is enough to drive away potential customers, Johnson explains.

“It creates a lot of uncertainty, and that is bad for the industry,” Johnson says, adding he already has lost because the possibility of future increased property taxes.

Gary Wolf, owner of Sundog Solar Energy, also is unclear on the bill’s effects.

“That is the kind of thing that creates a market of uncertainty when there was already a level of uncertainty in the industry,” he says. But he does feel solar is getting singled out, and not in a good way.

“Our country has always picked things to subsidize, from coal, oil, railroads, steel – we have always picked key industries and done what private market can’t do, and that is get it going in the beginning,” he says.

“Now coal and oil and railroads are still, to this day, subsidized by the federal government for a much larger amount than what the solar industry is. And the solar industry does not want to have all these incentives forever. We would like everything to be on an equal footing in the marketplace, and right now it is not. What is wrong with subsidizing renewable energy so we can compete in the global market place in this early time?

“People who object to their tax dollars being used for something they don’t like, well my tax dollars are being used for all sorts of things I don’t like, too, like mountaintop removal, coal and oil depletion allowances, the wars in Iraq and Afghanistan,” Wolf adds.

“We spent a huge amount of our budget to protect the oil lanes, and I don’t hear people objecting to that use of federal tax dollars. They ought to, particularly if they are going to be so vocal about tax dollars being used to support the solar industry.”

Next step

The bill was to be looked at again on Tuesday, but was deferred until next week. But despite the confusion, Mumpower insists the solar industry is fully on board with the bill, pending a few wording tweaks.

“Kelsie and I happened to be at a table this past Tuesday with a leading solar manufacturer in Tennessee, and they have agreed to the amendment we have right now, and I think we are going to have a new amendment next week that makes everybody even happier,” he says.

Johnson is anything but happy and worries about the bill’s effect on the state, especially when it comes to lease agreements.

“The solar industry is all about the future,” Johnson says. “We don’t have much history. We have only been in Tennessee for five years. The leasing of systems is the next step and we have been working hard to put those in place.

“This bill kills lease arrangements because the state would take 10-20 percent of the system production. And that ruins the ROI for an investor. We have a lot more jobs than the coal industry, which is quite small in Tennessee. But the coal industry and petroleum industry are all getting benefits. Why are we getting singled out?”