A new law in Connecticut aims to clarify property tax payments for commercial solar arrays. The law, which applies to commercial solar facilities that commence operation after July 1, 2026, creates a uniform tax of $10,000 a year for every megawatt of electricity the panels are capable of producing.

Background

For years, state law gave municipalities and their tax assessors the leeway to determine the value of solar panels and other equipment subject to personal property taxes. This led to confusion and litigation over tax bills for solar projects. Developers and municipal leaders have negotiated deals to stabilize their tax payments and provide more predictability to both parties.

The new law, authored by state Rep. Jamie Foster, D-Ellington, sets a uniform capacity tax that applies to large, ground-mounted solar arrays with an output of over 1 megawatt. The tax rate is $10,000 per megawatt, and it will be in effect for 20 years. During this time, solar developers will be exempt from paying personal property taxes on the equipment, but the land underneath the array will still be subject to local real estate taxes.

Impact

The law is expected to provide more predictability and stability for both developers and municipalities. It will also make it easier for local officials to determine whether or not a specific project is in the best interest of the town and its finances. East Windsor First Selectman Jason Bowsza, whose town is home to the largest concentration of commercial solar arrays in Connecticut, said that the new law will help towns compare the revenue they currently receive from a given property against what they would receive if solar were installed there.

Original reporting: The Connecticut Mirror — read the source article.