August 4, 2021
Property taxes are assessed by all states—generally on an annual basis—and reflect in some aspect the real property value. States are constantly implementing new ways to encourage the installation of solar through financial modifications and incentives. In states such as Minnesota, they utilize taxes on solar energy production in lieu of property taxes.
Minnesota is one state that imposes a solar energy production tax in place of personal property tax on solar facilities. Owners of solar facilities are required to report their facility’s annual energy production to the Minnesota Department of Revenue by January 15.
An additional 15-day extension may be granted if a written request demonstrating good cause is submitted. If the report is submitted late, the Department of Revenue will apply a production rate of 30% towards the combined nameplate capacity of the solar system.
The production tax rate is $1.20 per megawatt hour (MWh) produced. The Minnesota Department of Revenue then notifies the owners and counties of the facility of the tax due by February 28. In the case of a disagreement, the Department of Commerce will determine the total size of the solar system and recalculate the tax. The tax is then paid to the counties where the facilities are located by May 15.
This Solar Energy Production Tax applies to facilities who generate energy in excess of 1 megawatt (MW). However, systems that generate a capacity of 1 megawatt or less are exempt from this production tax. Additionally, personal property that consists of solar electric energy systems is exempt from property taxes.
Minnesota Solar Land Leasing
If you’re a Minnesota landowner may be able to generate extra revenue from your unused land. YSG Solar is seeking suitable land to develop solar farm projects in MN. Call today at 212.389.9215 or send us an email to learn how it all works. Learn more about Minnesota solar land leasing here.
YSG Solar is a project development company responsible for commoditizing energy infrastructure projects. We work with long-term owners and operators to provide clean energy assets with stable, predictable cash flows. YSG's market focus is distributed generation and utility-scale projects located within North America.
Sources:
https://www.stoel.com/legal-insights/special-reports/the-law-of-solar/tax-issues
https://www.revenue.state.mn.us/solar-energy-production-tax