Property tax policy changes for green energy installations

Wednesday, January 11, 2012

Story updated 13 January 2011

by SUSAN MANN

The provincial government’s clarifications of property tax policies for renewable energy installations are in line with suggestions made by the Ontario Federation of Agriculture, says president Mark Wales.

Small-scale solar projects are just part of your farm field essentially, he notes.

Under the government’s clarified policies announced Jan. 4 and retroactive to Jan. 1, 2011, small-scale, ground-mounted solar installations with a generating capacity up to 10 kilowatts (kW) won’t have an increase or change in tax classification.

For anaerobic digestion facilities, Wales says they’re simply another way of storing and handling manure and should be treated as farm buildings. The government’s policies note anaerobic digestion facilities of any size located on a farm and operated by a farmer will be taxed at the farm rate.

“It’s good to see they’ve recognized that,” Wales says, adding its good the policies are retroactive to January 2011.

In its Jan. 4 press release, the Finance Ministry says the changes will provide greater clarity by creating additional categories for property tax assessment based on the size and location of energy generation along with who is conducting the generation. The move will encourage property owners to continue installing and using renewable energy technologies.

For rooftop installations, the assessment and property tax classification won’t change because a renewable energy installation was added on the building’s roof.

For ground-mounted solar installations, the property tax treatment will depend on the size and location of the facility along with who is conducting the generating. Policies for those with a generating capacity over 10 kilowatts and up to 500 kilowatts and large installations over 500 kilowatts of generating capacity along with ground-based generation by corporate power producers can be found on the ministry's website.

Wind turbines will be assessed at the rate of $40,000 per megawatt of installed capacity except in two situations where the assessment wound not be affected by the installation - rooftop and ground-based installations up to 10 kilowatts. Their tax treatment is consistent with policies in place for them since 2005. BF