In January 2012, Ontario Regulation 282/98 under the Assessment Act was amended to provide greater clarity and introduce new rules governing the property tax treatment of renewable-energy installations. The amendments apply to facilities that generate electricity using solar energy, wind energy, or anaerobic digestion of organic matter. The amendments took effect January 1, 2011.
Summary of treatment
- For rooftop Installations, the assessment and tax classification of property will not change due to the addition of a renewable energy installation on the rooftop of a building.
- For ground Installations, the property tax treatment depends on the size and location of the facility as well as who is conducting the generation, as outlined here: The following rules apply where energy generation is conducted by a person who is not ordinarily in the business of electricity generation, transmission or distribution, and where the generation is ancillary to another activity on the same property.
Small-size ground installations with a generation capacity up to 10 kW will not experience an increase in assessment or a change in tax classification.
Medium-size ground installations with a generation capacity over 10 kW and up to 500 kW will be taxed based on the surrounding land use (e.g. residential, farm, multiresidential, commercial).
Large-size ground installations with a generation capacity over 500 kW will be taxed based on the surrounding land use for the proportion of assessment up to 500 kW, and at the industrial rate for the proportion over 500 kW. For example, if a 560 kW wind tower is located on multi-residential property, the assessment of the wind tower and associated land would be apportioned 89% to the multi-residential tax class and 11 per cent to the industrial tax class.
- For On-Farm Anaerobic Digestion: Organic materials in an enclosed vessel are broken down by micro-organisms, in the absence of oxygen. Anaerobic digestion produces biogas (primarily of methane and carbon dioxide). Anaerobic digestion systems are also often referred to as “biogas systems.” Anaerobic digestion facilities of size that are located on a farm and are operated by the farmer will be taxed at the farm rate.
- For generation by corporate power producers, consistent with historic treatment, these facilities operated by entities whose primary business is the generation, transmission, or distribution of electricity (“corporate power producers”) will continue to be taxed at the industrial rate.
- For wind turbine towers, Consistent with the treatment that has been in place since 2005, these will continue assessed at $40,000/MW of installed capacity, except in the two situations noted above where the assessment would not be affected by the installation (rooftop installations and ground-based installations up to 10 kW).
Ontario Regulation 282/98 was also amended to provide clear policy regarding energy efficiency and energy conservation installations that use renewable energy technologies. As a result, the assessment of properties with an active solar heating or cooling system or a ground-sourced geothermal heating or cooling system will not be increased as a result of that improvement. Questions prompted by the regulatory amendments described above may be directed to the Ministry of Finance, Property Tax Legislation and Assessment Policy Branch:
In January 2012, Ontario Regulation 282/98 under the Assessment Act was amended to provide greater clarity and introduce new rules governing the property tax treatment of renewable-energy installations. The amendments apply to facilities that generate electricity using solar energy, wind energy, or anaerobic digestion of organic matter. The amendments took effect January 1, 2011.
Summary of treatment
- For rooftop Installations, the assessment and tax classification of property will not change due to the addition of a renewable energy installation on the rooftop of a building.
- For ground Installations, the property tax treatment depends on the size and location of the facility as well as who is conducting the generation, as outlined here: The following rules apply where energy generation is conducted by a person who is not ordinarily in the business of electricity generation, transmission or distribution, and where the generation is ancillary to another activity on the same property.
Small-size ground installations with a generation capacity up to 10 kW will not experience an increase in assessment or a change in tax classification.
Medium-size ground installations with a generation capacity over 10 kW and up to 500 kW will be taxed based on the surrounding land use (e.g. residential, farm, multiresidential, commercial).
Large-size ground installations with a generation capacity over 500 kW will be taxed based on the surrounding land use for the proportion of assessment up to 500 kW, and at the industrial rate for the proportion over 500 kW. For example, if a 560 kW wind tower is located on multi-residential property, the assessment of the wind tower and associated land would be apportioned 89% to the multi-residential tax class and 11 per cent to the industrial tax class.
- For On-Farm Anaerobic Digestion: Organic materials in an enclosed vessel are broken down by micro-organisms, in the absence of oxygen. Anaerobic digestion produces biogas (primarily of methane and carbon dioxide). Anaerobic digestion systems are also often referred to as “biogas systems.” Anaerobic digestion facilities of size that are located on a farm and are operated by the farmer will be taxed at the farm rate.
- For generation by corporate power producers, consistent with historic treatment, these facilities operated by entities whose primary business is the generation, transmission, or distribution of electricity (“corporate power producers”) will continue to be taxed at the industrial rate.
- For wind turbine towers, Consistent with the treatment that has been in place since 2005, these will continue assessed at $40,000/MW of installed capacity, except in the two situations noted above where the assessment would not be affected by the installation (rooftop installations and ground-based installations up to 10 kW).
Ontario Regulation 282/98 was also amended to provide clear policy regarding energy efficiency and energy conservation installations that use renewable energy technologies. As a result, the assessment of properties with an active solar heating or cooling system or a ground-sourced geothermal heating or cooling system will not be increased as a result of that improvement. Questions prompted by the regulatory amendments described above may be directed to the Ministry of Finance, Property Tax Legislation and Assessment Policy Branch:
Mr. Murray Mann, (416) 325-2370, murray.mann@ontario.ca
Ms. Nivedita Ravi, (416) 212-4694, nivedita.ravi@ontario.ca
Filed Under: News, Policy
