Property owners who install electricity-generating energy technologies may not have to worry about potentially higher property taxes.

That’s because the provincial government has introduced changes to the property tax assessment policies used to determine taxation rates.

Previously, any property that produced electricity was taxed at the industrial rate—regardless of where and how the electricity was generated.

Problem?

The industrial tax rate tends to be, as a rule, higher than other rates.

So if you had a co-generation facility at your restaurant, for example, you were taxed at the industrial rate—regardless of whether or not your business and building were, in fact, industrial in nature.

(Farms or residences that generated less than 500 kW via wind turbine towers were exempt from this, by the way.)

Now, taxation policies have been changed to take size and location of energy generation into account, introducing a little more flexibility and, ideally, an incentive to residences and businesses to install energy-generating technologies using solar and wind power.

Rates are now as follows:

  • Small-size ground installations, with generation capacity up to 10 kW, will not result in assessment increase or change in tax classification.
  • Medium-size ground installations, with generation capacity over 10 kW up to 500 kW, will be taxed based on the surrounding land use (e.g. residential, farm, multi-residential, commercial), rather than applying the industrial rate automatically.
  • Large-size ground installations, with 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.
  • Anaerobic digestion facilities of any size that are located on a farm and operated by the farmer will be taxed at the farm rate.

For a more detailed look at these changes, take a look at this fact sheet from the Government of Ontario.

What do you think? Does this inspire you to investigate renewable sources of energy?

Image credit: ab9kt