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Volume 6 - Opinions of Counsel SBEA No. 122

Opinions of Counsel index

Solar or wind energy systems exemption (computation) (solar greenhouse) - Real Property Tax Law, § 487:

The amount of exemption to be granted to a solar greenhouse pursuant to section 487 of the Real Property Tax Law is the difference in value between the solar greenhouse (i.e., a greenhouse constructed in a manner to maximize energy gain and which complies with the guidelines established by the New York State Energy Office) and a conventional greenhouse.

Pursuant to subdivision 2 of section 487 of the Real Property Tax Law, real property, which includes a solar or wind energy system complying with the definitions and guidelines established by the New York State Energy Office, is exempt from taxation to the extent of any increase in value of the property attributable to the inclusion of the solar or wind energy system for a period of 15 years. The exemption is applicable to both active and passive solar energy systems. Our opinion has been requested concerning the exemption as it relates to a “solar greenhouse” to be attached to a home.

As is noted in the Energy Office pamphlet (January, 1978), passive solar energy systems are more difficult to identify than active systems because of their close integration with the building. Although some aspects of construction, such as orientation of the home or placement of windows, may maximize passive solar energy use, they do not qualify for exemption, since they do not in and of themselves constitute a passive energy system. Again, as noted in the pamphlet, some passive systems such as drum walls may qualify for exemption.

Subdivision 2 of section 487 exempts from taxation the increase in assessed value attributable to the “solar or wind energy system,” and that phrase is defined in subdivision (1) (a) as the “collectors, controls, energy storage devices, heat pumps and pumps, heat exchangers, windmills, hardware or equipment” used to collect, convert, store and distribute energy. That paragraph goes on to state, “When components serve dual functions as part of the building structure as well as parts of the solar or wind energy system, such components shall be considered solar or wind energy equipment in the amount that the cost of such components is increased to enable their use as part of the solar or wind energy system.”

A greenhouse is real property (see, e.g., 2 Op.Counsel SBEA No. 24) and is subject to real property taxation. However, unlike a drum wall or roof pond, a solar greenhouse has a function independent of any solar energy considerations (i.e., it is used to grow plants). Therefore, in our opinion, the amount of exemption to which a solar greenhouse may be entitled pursuant to section 487 is equal to the difference in value between the solar greenhouse (with its improvements made to maximize energy gain) and a conventional greenhouse without such improvements.

Therefore, an assessor should increase an assessment if he determines that property has a greater market value after the construction of a solar greenhouse. For example, if he determines that the solar greenhouse has increased the market value by $1,500, whereas a corresponding conventional greenhouse would increase it by $1,250, he should increase the assessment by $1,500 and grant an exemption in the amount of $250 for a final additional taxable assessment of $1,250.

May 3, 1979