Local-option Tax Incentive for Larger Industrial-Scale Solar Installations Passes Senate Committee

January 25, 2018

VACo supports SB 902 (Lucas), which makes it a local option to provide a property tax exemption for larger utility-scale solar facilities. The Senate Finance Committee unanimously passed SB 902 on January 24.

Under current law such facilities greater than 20 Megawatts (MW) in electric generation capacity are provided a mandatory 80 percent exemption from local property tax. As originally drafted, the mandatory 80 percent exemption would apply to projects between 20 MW and 100 MW. The bill was amended in committee to (1) apply the exemption to projects between 20 MW and 150 MW; and (2) to clarify that for purposes qualifying for the tax exemption, solar installations “owned or operated by a business on one site or contiguous sites shall be considered one project.”

VACo supports the bill as amended, noting that projects larger than 150 MW in generating capacity will no longer qualify for the mandatory exemption. Additionally, the amendment clarifying the definition of a project under one ownership, makes clear that the mandatory exemption, if applicable, is for the project as a whole and not in parts. Lastly, the bill still allows localities to, at their discretion, provide a tax incentive for these larger installations.

VACo Contact: Joe Lerch, AICP

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