Local Option - Solar, Wind & Biomass Energy Systems Exemption

November 07, 2023


Section 487 of the New York State Real Property Tax Law provides a 15-year real property tax exemption for solar, wind energy, and farm-waste energy systems constructed in New York State. As currently effective, the law is a local option exemption, meaning that local governments are permitted to decide whether or not to allow it. The exemption was mandatory prior to a 1990 reenactment in which the local option clause was added. The exemption is valid unless a government opts out of the exemption, as opposed to the more common practice of requiring governments to "opt-in" in order to offer an exemption. 

As originally created, the exemption was limited to solar and wind energy systems, but in September 2002, it was expanded (S.B. 6592) to include farm-waste energy systems. The maximum rated system capacity for eligible farm-waste energy systems is 1,000 kilowatts (kW). In 2017, A.B. 260 included micro-hydroelectric energy systems, fuel cell electric generating systems, micro-combined heat and power generating equipment systems, electric energy storage equipment, and electric energy storage systems as eligible for the incentive.

S.B. 5966A enacted in July 2006 extended the previous December 31, 2006 in-service deadline to December 31, 2010, and A.B. 10875 enacted in August 2010 extended the deadline until December 31, 2014. S.B 7062 of 2014 further extended the deadline to January 1st, 2025.

The exemption applies to solar, wind, or farm waste energy systems that (a) exist or constructed prior to July 1, 1988 (mandatory), or (b) constructed after January 1, 1991, and prior to January 1, 2025 (local option). Micro-hydroelectric energy, fuel cell electric generating, micro-combined heat and power generating equipment, or electric energy storage equipment and systems must be constructed after January 1, 2018 and before January 1, 2025. The amount of the exemption is equal to the increase in assessed value attributable to the energy system. The exemption applies only to general municipal and school district taxes; it cannot be applied to special assessments or special ad valorem levies. 

With respect to systems constructed after January 1, 1991, and before January 1, 2025, each county, city, town, village and school district (except the city school districts of New York, Buffalo, Rochester, Syracuse and Yonkers) may choose whether to disallow the exemption. The option must be exercised by counties, cities, towns and villages through adoption of a local law and by school districts through adoption of a resolution. Click here for a list of municipalities that have opted not to offer the exemption. Alternatively, a local government that has not opted out of the exemption is permitted to require the property owner to enter into a contract for payments in lieu of taxes, not to exceed the amount payable without the exemption. 

Program Overview

Implementing Sector: State
Category: Financial Incentive
State: New York
Incentive Type: Property Tax Incentive
Web Site: http://www.tax.ny.gov/research/property/assess/manuals/vol4/pt1/sec4_01/sec487.htm
Administrator: New York State Department of Taxation and Finance
Start Date: In-service date of before 07/01/1988 or between 01/01/1991 & 01/01/2025
Eligible Renewable/Other Technologies:
  • Solar - Passive
  • Solar Water Heat
  • Solar Space Heat
  • Solar Thermal Electric
  • Solar Thermal Process Heat
  • Solar Photovoltaics
  • Wind (All)
  • Biomass
  • Combined Heat & Power
  • Fuel Cells using Non-Renewable Fuels
  • Daylighting
  • Solar Pool Heating
  • Wind (Small)
  • Hydroelectric (Small)
  • Fuel Cells using Renewable Fuels
  • Lithium-ion
Incentive Amount: 100% exemption for 15 years (unless local jurisdiction has opted out)
Eligible System Size: Farm-waste energy systems: maximum size of 1,000 kW
Other eligible property: no specific limits


Name: NYCL Real Property Tax § 487
Date Enacted: 01/01/1977
Effective Date: Before 07/01/1988 or between 01/01/1991 & 12/31/2014
Expiration Date: 01/01/2025
Name: Exemption Handbook
Date Enacted: 11/06/2009
Name: S.B. 7026 of 2014
Date Enacted: 09/04/2014
Effective Date: 09/04/2014
Expiration Date: 01/01/2025


Name: Property Tax
Organization: NY State Department of Taxation and Finance
Address: Harriman Campus Road
Albany NY 12227
Phone: (518) 591-5232
Email: real.property@tax.ny.gov

This information is sourced from DSIRE; the most comprehensive source of information on incentives and policies that support renewables and energy efficiency in the United States. Established in 1995, DSIRE is operated by the N.C. Clean Energy Technology Center at N.C. State University.