In Minnesota, wind and solar projects pay property taxes based on both land value and energy production. Land is classified according to its primary use—typically agriculture or energy production—and taxed at local rates accordingly. In addition, projects pay a production tax per megawatt-hour (MWh) of electricity generated annually.
Click on the buttons above to understand the tax impacts for wind and solar projects. Note that all values are estimates.
Taxes on Wind and Solar Projects
- Land tax: Wind and solar projects continue to pay property taxes on the land they occupy, though sometimes the classification of the land changes. Land directly under solar panels is usually considered as commercial and taxed at a higher rate than agricultural land. In contrast, land around wind turbines typically retains its agricultural classification and lower tax rate.
- Production tax: Instead of paying personal property taxes on equipment, projects pay $1.20 per MWh of electricity produced each year. Annual production varies depending on factors such as local conditions (e.g., wind or sunlight levels), energy demand (e.g., grid power needs), and specific project requirements (e.g., maintenance, adverse conditions, compliance).
Have questions? Click to visit the landing page or download the policy brief for more information.