ECCSR HANDOUT12-14-2005 - Laserfiche WebLink

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Website: http://www.state.mn.us/cgi-bin/portal/mn/jsp/content.do?id=-536881350&subchannel=- 536881511&sc2=null&sc3=null&contentid=536885915&contenttype=EDITORIAL&programi. ,~ e Summary: Minnesota offers a payment of 1.6¢/kWh for electricity generated by hydro facilities and on-farm anaerobic manure methane digesters. This incentive is available to hydro facilities located at the site of a dam, if the dam was in existence as of March 31, 1994, and begins generating electricity after July 1, 1994, or generates electricity after substantial refurbishing of a facility that begins after July 1, 2001. Qualifying projects receive payments for 10 years. Minnesota also issues a payment of 1.5¢/kWh for electricity generated by new wind-energy projects less than 2 MW in capacity for up to 200 MW of program capacity. In November 2003, the Minnesota Department of Commerce (DOC) announced that planned capacity for new wind energy systems had reached the goal-of 200 MW, and the DOC established a waiting list for additional projects. As of May 2005, 155 MW were operating and receiving incentive payments. Based on April 2005 legislation, the remaining 45 MW in the program queue and 46 MW on the waiting list all became eligible for an incentive payment of 1¢/kWh incentive payment. The program was closed to new applicants on January 1, 2005. This program, supported in part by Minnesota's Renewable Development Fund, is unique because it offers payments for actual energy output. The advantage of a production incentive program is that production payments and credits place a premium on project output as opposed to rated capacity, which may or may not be fully utilized once installed. This is one of the few state-level, performance- based renewable-energy incentives offered in the United States. Minnesota's production credit roughly mirrors a federal corporate production tax credit allowing a 1.9¢/kWh tax credit for electricity produced from wind, solar, geothermal and closed-loop biomass. Wind and Solar-Electric (PV) Systems Exemption Incentive Type: Property Tax Exemption Eligible Renewable/Other Technologies: Photovoltaics, Wind Applicable Sectors: Max. Limit: Terms: Authority 1: Authority 2: Effective Date: Commercial, Residential None See summary Minn. Stat. § 272.028 Minn. Stat. § 272.02 1/1/92 Summary: Minnesota excludes from (real estate) property taxation the value added by solar-electric (PV) systems. However, the land on which a PV or wind system is located is taxable. In addition, all real and personal property of wind-energy systems is exempt from the state's property tax. In lieu of a property tax on large wind-energy systems, a production tax was implemented in 2002. Wind systems greater than 12 MW are taxed at a rate of 0.12 cents/kWh; systems between 2 MW and 12 MW are taxed at a rate of 0.036 cents/kWh; and systems between 250 kW and 2 MW are taxed at a rate of 0.012 cents/kWh. Wind systems under 250 kW are exempt from the production tax. However, a provision in a separate statute (Minn. Stat. § 272.028) allows a mutually agreeable alternative to be negotiated between the local government authority and the wind facility owner for the purpose of maintaining "public infrastructure and services." For example, a lower tax might be