Dive Brief:

The Arizona Supreme Court ruled that customers who lease rooftop solar panels are exempt from paying property taxes, saving major residential solar installers Sunrun and Tesla's now-defunct SolarCity, who own the systems, millions in potential taxes. The lease model, or power purchase agreement model, was the mainstay of these companies' business proposition in the beginning.

However, the ruling could enable lower courts to decide whether or not counties could assess those panels for potential taxes, the Arizona Republic reports.

The case was sparked by a move from the state Department of Revenue in 2013, which said that tens of thousands of customers who leased rooftop solar panels could be on the hook for property taxes. At the time, those solar arrays amounted to $34,000 per system the first year, the news outlet reported, amounting to $152 in taxes that would decline over time.

Dive Insight:

Arizona's battles over rooftop solar are not finished yet. A case that dated back as far as 2013, the beginning of the first round of fights between the state's utilities and solar installers, appears resolved for now, but could move to the local level should lower courts resume it.

The state Supreme Court ruled that the Department of Revenue lacked authority to levy taxes on leased rooftop solar systems. The Department of Revenue said leased panels do not qualify for an exemption that said solar energy systems that establish onsite consumption have no value and are not adding to the property. Arizona Public Service, the biggest player in the rooftop solar battles, supported this claim.

It's unclear whether or not the fight over property taxes will return to the lower courts. Arizona already terminated its current net metering program in exchange for a rate closer to the utilities' avoided cost. And leases are slowly declining as solar installers shift toward more of a loan model.