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Assessor Manual, Exemption Administration: RPTL Section 487

Exemption Administration Manual—Part 1: Residential—Other Than Multiple Dwellings

Section 4.01 - RPTL Section 487: Solar, Wind, or Farm waste Energy Systems

Exemption codes
DescriptionExemption code
Publicly owned property 3030_
Privately owned property 4950_

Year originally enacted: 1977, reenacted 1990, 2014

Related statutes: Publ Serv L §66-j

Summary:

Real property that contains a solar, wind, or farm waste energy system approved by the State Energy Research and Development Authority is exempt from taxation for a period of 15 years to the extent of any increase in assessed value due to the system. Such property is liable for special ad valorem levies and special assessments. The exemption as reenacted in 1990 is subject to local option (see below).

Eligibility requirements

Ownership requirements:

None.

Property location requirements:

None.

Property use requirements:

Property must contain a solar or wind energy system, an arrangement of solar or wind energy equipment designed to provide heating, cooling, hot water, or mechanical, chemical, or electrical energy by the collection of solar or wind energy and its conversion, storage, protection, and distribution. Solar or wind energy equipment qualifying the property for exemption includes collectors, controls, energy storage devices, heat pumps and pumps, heat exchangers, windmills, and other materials, hardware, or equipment necessary to the process by which solar radiation or wind is collected, converted into another form of energy, stored, protected from unnecessary dissipation, and distributed. It does not include pipes, controls, insulation, heat pumps, or other equipment that is part of the normal heating, cooling, or insulation system of a building. It does include insulated glazing or insulation to the extent that such materials exceed the energy efficiency standards required by law.

 Alternatively, the property must contain a farm waste energy system, an arrangement of farm waste electrical generating equipment necessary to the process of producing, collecting, storing, cleaning, and converting agricultural waste biogas into forms of energy such as thermal, electrical, mechanical or chemical and by which the biogas and converted energy are distributed on-site. It does not include pipes, controls, insulation, or other equipment that are part of the normal heating, cooling or insulation system of a building. Farm waste electric generating equipment includes equipment that generates electrical energy from biogas produced by the anaerobic digestion of agricultural waste, such as livestock manure, farming waste and food processing wastes with a rated capacity of not more than 1,000 kilowatts that is: 1) manufactured, installed and operated in accordance with applicable government and industry standards, 2) connected to the electric system and operated in conjunction with an electric corporation's transmission and distribution facilities, 3) operated in compliance with the provisions of Section 66-j of the Public Service Law, 4) fueled at a minimum of 90 percent annually by biogas produced from the anaerobic digestion of agricultural waste such as livestock manure materials, crop residues and food processing wastes, and 5) fueled by biogas generated by anaerobic digestion with at least 50 percent by weight of its feedstock being livestock manure materials annually.

Structures that satisfy the requirements for exemption under RPTL §483-e (Anaerobic Digestion Facilities) cannot receive this exemption.

Certification by state or local government:

None.

Required construction start date or other time requirement: 

Solar, wind, or farm waste energy system must be (a) in existence or constructed prior to July 1, 1988, or (b) constructed after January 1, 1991 and before January 1, 2025. 

Local option

Solar, wind, or farm waste energy system must be (a) in existence or constructed prior to July 1, 1988, or (b) constructed after January 1, 1991 and before January 1, 2025.

Limitation on exemption

Limitation on exemption by amount, duration, and taxing jurisdiction
Type of limitationGeneral municipal taxesSchool district taxesSpecial ad valorem leviesSpecial assessments
Amount Yes* Yes* No exemption allowed No exemption allowed
Duration 15 years 15 years No exemption allowed No exemption allowed
Taxing jurisdiction: county or county special district Exempt** Not applicable Taxable Taxable
Taxing jurisdiction: city Exempt** Not applicable Taxable Taxable
Taxing jurisdiction: town or town special district Exempt** Not applicable Taxable Taxable
Taxing jurisdiction: village Exempt** Not applicable Not applicable Taxable
Taxing jurisdiction: school district Not applicable Exempt** Not applicable Not applicable

* Amount is limited to any increase in assessed value that is attributable to the solar, wind, or farm waste energy system. (see Calculation of Exemption).

**If allowed by local option (see also D. Payments In Lieu of Taxes below).

Payments in lieu of taxes

None required.

However, each county, city, town, village and school district (except the school districts of New York, Buffalo, Rochester, Syracuse, and Yonkers) that has not disallowed the exemption may require the owner to enter into a contract for payments in lieu of taxes. As part of such contract, the property owner may be required to make annual payments in an amount not to exceed the amounts which would have been payable without the exemption. Such a contract may not operate more than 15 years, commencing from the date on which the benefits of this exemption first become effective.

Calculation of exemption

General municipal and school district taxes:

Increase in assessed value attributable to the solar, wind, or farm waste energy system. If a solar, wind, or farm waste energy system or components of it also serve as part of the building structure, the increase in value exempt from taxation is equal to the assessed value attributable to such system or components multiplied by the ratio of "incremental cost" of the system or components to the total cost of the system or components. The "incremental cost" is the increased cost of the solar, wind, or farm waste energy system or component which also serves as part of the building structure, above the cost for similar conventional construction, which enables its use as a solar, wind, or farm waste energy system or component.

Note: Incremental cost calculations only apply when eligible systems are incorporated into structures. Incremental cost calculations should not be applied when the eligible system is standalone.

Example
DescriptionExemption amount
a. Total cost of solar energy system $10,000
b. Incremental cost of system: $4,000
c. Ratio of incremental cost to total cost [(b) divided by (a)]: 40%
d. Increase in assessed value of property attributable to
addition of solar energy system:
$6,000
e. Assessed value exempt due to addition of
system [(d) times (c)]:
$2,400

See also the examples given in the definitions/guidelines booklet following this Exemption Profile.

Note: If a farm waste energy system would otherwise be subject to the provisions of RPTL Article 5, Title 5, concerning oil and gas economic units, those units are exempt from taxation if energy produced in a farm waste energy system is collected from a landfill or used to power farm waste energy systems or farm waste electrical generating equipment (see Property Use Requirements above). This exemption applies to property on assessment rolls based on taxable status dates occurring on or before December 31, 2017. 

Special ad valorem levies and special assessments:

No exemption allowed.

Coding of exemption on assessment roll

Exemption codes on assessment roll
CodeDescription of alternative codes possible
3030_ Publicly owned property
4950_ Privately owned property

Assessment roll section: Taxable (RPS Section 1).

Note: These codes should not be used to identify property that is exempt under any of the statutes listed under Similar Exemptions below. For coding of such property, see the Exemption Profile for the statute that applies.

Filing requirements (owner or occupant of property)

RP-487, Application for Tax Exemption of Solar, Wind, or Farm Waste Energy Systems

Reporting requirements (assessor)

None. 

Similar exemptions

Exemptions by subject
SubjectStatute
Energy conservation improvements to
certain residential premises
RPTL §487-a
Green roof properties in New York City RPTL §499-bbb
Solar electric generating systems in New York City RPTL §499-bbbb

Exemption application forms

Form RP-487, Exemption Application

A booklet on solar, farm waste and wind systems definitions and guidelines for purposes of this exemption is available at the Renewables Documents Library of the New York State Energy Research and Development Authority. 

Please send general questions or comments to Orpts Solutions Center.

Updated: