Solar and Wind Energy
September 26, 2014
NC DOR
Tina Stone
Michael Brown
Considerations for Valuing
Solar and Wind Farms
• Real Property
– Market Value
• Present-Use Value
• Business Entities
• Deferred Taxes
• Personal Property
Market Value Considerations
• Change in use of the property—has the value
been effected. Review your current SOV.
• You should consider the lease when valuing the
property. The value of the property may be
higher/lower than prior value depending on
location. For rural properties the value may go
up.
• For next general reappraisal, consider
developing a land line code in your CAMA
package for solar/wind properties.
Market Value
• Properties leased for solar farms range from
$400 to $1,000 per acre a year. Most common
figures heard are in the $600 to $800 range.
• Research you county and others as well to
obtain best available information for these
properties.
In PUV— Individually Owned
• Land owned by an individual that is
converted to a solar farm and is still being
used to raise animals can still qualify.
• To continue in the program the statutes
contemplate land that is in actual production.
Animals Commonly Used
• We are aware of situations where the sheep
are being raised for the production of wool
and meat. At this time, we are only aware of
sheep being used in conjunction with a solar
farm.
Animals Commonly Used
• We are not stating that certain animals do not
qualify.
• We suggest that you review any changes to a
property on a case by case basis.
• Goats we have been told may eat/damage the
equipment.
Animals Commonly Used
• We have been told that cows have been used
around solar panels.
• They have to be raised to a greater height.
Additional cost to install is likely.
In PUV—Business Entity
• For property owned by a business entity that
may convert some of the property to a solar
farm remember that the "principal business"
requirement still applies.
• If animals are in production with solar farm
the property can still possibly qualify under
PUV as a business entity.
In PUV—Business Entity
• As a part of the ownership test, the income
from the farming operation and the solar farm
may need to be reviewed to determine if the
property still qualifies for present-use value.
• One test would be to review a income and
expense report of the business entity to
determine if more than 51% of the income
was from either agriculture, horticulture or
forestland .
PUV—Deferred Taxes
• Where land has been converted to a solar
farm and the land is no longer being farmed
the deferred taxes would become due.
• This would include the area that has been
fenced off and is now being used as a solar
farm. The remainder of the property would
still able to qualify, assuming all other
requirements are met.
PUV—Deferred Taxes
• For wind farm—land that is no longer in
production of agricultural, horticultural or
forest land the rollback will be due. This could
be any fenced off area or base area of a wind
turbine.
• Deferred taxes for the current year, and three
prior years with interest would be due.
Just to clarify…
• Fencing around the perimeter of the solar
farm is okay. Fencing which prevents the
animals from grazing under the panels is not.
• Solar panels should be high enough off the
ground for animals to freely graze under.
• Review properties on a case by case basis.
N.C. Wind Farms Issues
• House Bill 484 / S.L. 2013-51—establishes a
permitting process for wind energy facilities
• DENR
• Military
• Power purchase agreements
Wind Power Facts
• Tower height: range from 200 to 300 feet
• Blade length: range from 66 to 130 feet, or more,
usually having three blades
• A 1.5 MW turbine is 260 ft. tall. The rotor assembly
(blades and hub) weighs 48, 000 lbs. The nacelle,
generator component weights 115,000 lbs. The
concrete for the tower is 58, 000 lbs. of reinforcing
steel and 250 cubic yards of concrete. The base is 50
feet in diameter and 8 ft. thick near the center.
• Source: Wikipedia
Source: http://www.appstate.edu/~js77542/REI-Broyhill-wind.html
PERSONAL PROPERTY
• 80% of a appraised value of a solar energy
electric system is to be excluded, under 105275(45).
• Taxpayer must list all improvements with the
tax office during regular listing period.
• Single application required under 105-282.1
Personal Property—Recent Appeal
• Thermal Solar Energy Equipment
• 200 Solar Panels, 2 Heat Exchangers, piping, 210,000 gallon storage tanks, sleeves, bracers &
connectors
• Produces Hot water used solely for the textile
manufacturing process
• Equipment is not used to provide heating and
cooling for the facility
Personal Property—Recent Appeal
• Taxpayer requested county to recognize 105277 (g) in the appraisal of this equipment
• County appraised the property as Business
personal property
PTC Decision
• PTC upheld the counties value
• 105-277 (g) does not apply to the solar
energy system of FLS was not relevant to this
subject property
• Taxpayer could possibly appeal decision of
PTC
• PTC decisions do not set precedent
Contact Information
NC Department of Revenue
Local Government Division
919.814.1129
Michael Brown
michael.brown@dornc.com
Tina Stone
Tina.Stone@dornc.com