MAIL: Property Tax on RE System

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DSIRE Property Tax Incentives for Renewables Map
DSIRE Property Tax Incentives for Renewables Map

We have enjoyed our combined 20 kW wind- and solar-electric system on our farm in rural Mercer County, Kentucky, for the past two years. It provides all of our electrical needs with ample surplus, but it’s a surplus that cannot be transferred or sold due to Kentucky’s restrictive net-metering law (but that’s another story). Due to a recent visit to our farm by the local property valuation administrator, we are grappling with the extent to which we should be taxed for our clean energy system. I wonder if you or any of your readers have any experience with this situation.

The degree to which our solar/wind system has increased our property value is a matter of debate—but not to the extent that we should pay taxes on its full purchase price. As tangible property, our system could incur a tax equaling our current tax bill. This seems lopsided, doesn’t it?

This situation punishes adopting clean energy in Kentucky. There are 38 states that exempt renewable systems from any property tax—but not so here in Kentucky. If a solar or wind installation increases the value of property, perhaps the question is not by how much, but whether it should be taxed at all. One would assume the increase in property value here in Kentucky would be much less than in California or some other state that offers property tax incentives for renewables, because renewable energy systems are an oddity here. People in the southern and western portion of Kentucky have Tennessee Valley Authority to thank for the Green Power Providers program, which made the net-zero Richardsville school project possible. (By the way, thanks for featuring that school in a recent issue of Home Power.)

Increasing property taxes is just another way to discourage clean energy in Kentucky! Having said that, I am not discouraged, but rather disgusted at the levels to which our legislators will stoop to thwart clean energy in the state. I however remain steadfastly committed to clean energy in Kentucky.

Bill Slater • via email

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