Solar panels in countryside.

Many communities which have been chosen as possible sites for solar farms have been very vocal in their opposition. They cite issues such as glare from the solar panels, the alleged hum emanating day and night from the installations and what happens when the panels are decommissioned when they reach the end of their productivity.

One aspect of solar farms which has recently been raised by opposing groups is the way in which the facilities are assessed for real estate taxes. The argument is that solar farms are multi-million dollar investments and should be taxed at that level.

According to the “Municipal Officials’ Guide to Grid-Scale Solar Development in Pennsylvania,” solar farms are assessed by the same criteria as any other business.

The guide states that Pennsylvania’s Consolidated County Assessment Law (section 8811) lists the following exception of items not subject to tax: “Machinery, tools, appliances and other equipment contained in any mill, mine, manufactory or industrial establishment shall not be considered or included as a part of the real estate in determining the value for taxation of the mill, mine, manufactory or industrial establishment.”

The Assessment Law Committee (ALC) of the Assessors’ Association of Pennsylvania (AAP) has interpreted that to categorize solar panels, transformers, inverters, and other equipment used in grid-scale solar development as not subject to taxation.

Just the land and the buildings are assessed for real estate taxation, according to Brooke Wright, Lycoming County’s chief assessor. Although the solar panels are not taxed, the homeowner receiving income from the company to have those solar panels on the properties is assessed for that income and will pay taxes on that, Wright said.

“There are three approaches to valuing. There’s the cost approach, the sales comparison approach and the income approach,” Wright said, adding that businesses are usually valued using the income approach.