Solar in New York, The Legal Landscape of Sustainable Energy Part 2: Solar Developers
Solar developers face some similar legal issues as the property owners discussed in Part 1, but also have some unique legal issues of their own. A point which is common to solar installation generally, but of particular importance to developers, is the property tax abatement offered by New York state. Put simply, solar arrays are taxed as real property, thus a landowner’s tax assessment may increase once the array is put into service.
H&H has vast experience with the issues associated with sustainable energy. We stand ready to assist you, whether you are a homeowner looking to install your own solar panels or a commercial developer looking to install large commercial solar arrays
New York has chosen to encourage solar development in the state by passing legislation which offers some relief to property owners in the form of tax abatement. §487 of the New York Real Property Tax Law provides an exemption from property tax increases assessed as a result of the installation of solar panels. However, municipalities can opt out of this exemption. In most cases, if a municipality opts out of the §487 exemption, large scale commercial solar development is not economically feasible.
The obstacles do not end there. Even if the municipality has not opted out of the §487 exemption, many municipalities require larger commercial projects to enter into a Payment-in-Lieu-of-Taxes (“PILOT”) Agreement with the municipality, school district, and/or the county. The PILOT amount may be less than the current property tax levy but could also be more than the current property tax levy. Further, the tax payment will most certainly increase over the life of the PILOT.
The negotiation of these PILOT agreements may impact the long-term economic feasibility of the project for the developer. This means that the application for and negotiation of the PILOT amount is of paramount importance.
Finally, developers must also ensure that the proper permits and zoning approvals are obtained from the appropriate municipal agency. Failure to do so could endanger the project before it even begins.
H&H stands ready to assist you with all of your sustainable energy needs. Please contact us today for a consultation.