Or. Admin. R. 150-307-0210 - Property Tax Status of Alternative Energy Systems

Current through Register Vol. 61, No. 4, April 1, 2022

(1) Definitions:
(a) "Alternative energy system" means a solar, geothermal, wind, water, fuel cell or methane gas energy system used for the purpose of heating, cooling or generating electricity.
(A) Solar alternative energy systems use the sun and may include but are not limited to:
(i) Solar electric or photovoltaic (PV) systems that consist of solar electric panels (photovoltaic cells) that convert sunlight directly into electricity and may include connective wiring, solar electric modules, inverter, mounting system, disconnection equipment, net-metering system, and storage batteries,
(ii) Solar heating or cooling systems that consist of active, passive, and thermal systems used for water, or space heating or cooling and may include south facing windows, trombe walls, extra thick concrete/stone floors designed for the absorption of heat, thermal chimneys, solar panels or collectors which directly heat coils of water on the roof or outside walls, extra hot water storage tanks, connecting piping, sensors, valves, pumps, heat exchangers, and controls.
(B) Geothermal alternative energy systems use heat extracted from the earth and may include but are not limited to geothermal heat pumps (GHPs), which can be used for both heating and cooling of buildings and hot water needs.
(i) Ground source geothermal heat pumps consist of buried loops or coils of tubing used to exchange heat.
(ii) Water source geothermal heat pumps consist of loops submerged in a lake, pond or well.
(C) Wind alternative energy systems produce mechanical or electrical power or energy. Wind turbines typically consist of a propeller driven generator attached to a building or tower used to drive a direct current generator which is generally tied to a battery storage system and used to power household or business needs. The system may be connected to a net-metering system or be completely off-grid. These systems may include:
(i) Small stand-alone wind turbines.
(ii) Groups of wind turbines.
(D) Water alternative energy systems or hydropower systems are used to generate electricity. These systems may include but are not limited to micro hydro systems which are small-scale facilities providing electricity to power homes, small farms, and businesses. Micro hydro systems typically consist of a small water drive wheel or turbine which is connected to an electric generator and the output is connected to the user by power wiring. These systems may include a storage battery system and net-metering system.
(E) Fuel cell alternative energy systems produce electricity electrochemically and non-reversibly, using hydrogen-rich fuel and oxygen, producing an electric current, water, and thermal energy. These systems may include but are not limited to fuel cell systems using reformed fossil fuels which also produce carbon dioxide.
(F) Methane gas alternative energy systems are typically gas collection systems used to fuel an electric generator and may also include methane digester systems. These systems may include but are not limited to:
(i) Methane collection systems installed at closed or partially closed land fills and used to fuel electric generator systems.
(ii) Methane digester systems owned by and installed at dairy farms and used to generate power.
(b) "Onsite" means a single, operationally integrated complex of property or properties composed of a single parcel of land and improvements thereon or a group of adjacent parcels and improvements thereon.
(2) Alternative energy systems qualify for exemption only if the system is a net metering facility, as defined in ORS 757.300, or is primarily designed to offset onsite electricity use.
Example 1 : A company installs solar panels to generate electricity. The solar energy system is installed as a net metering facility. Therefore, the solar energy system qualifies for the property tax exemption.
Example 2 : A utility owns a large wind generating farm. The system is not a net metering facility nor is it designed to offset onsite electricity use. Therefore, the wind energy system does not qualify for the property tax exemption.
Example 3 : A methane collection system installed at a closed portion of an otherwise active landfill is used to fuel an electric generating facility to produce electricity used to offset power use at the active portion of the landfill. The system qualifies for the property tax exemption.
Example 4 : A methane digester system installed at a dairy farm is used to fuel an electric generator system to generate power for the dairy farm's operations. This qualifies for exemption.
Example 5 : An industrial facility installs a methane collection system where methane gas is compressed and used as a fuel source to generate electricity for the facility's operations. This qualifies for exemption.
(3) Alternative energy systems that provide heating, cooling or that generate electrical energy for personal consumption qualify for the property tax exemption only to the extent that they are primarily designed to offset onsite electricity use or are net metering facilities.
(4) Alternative energy system devices and components are exempt to the extent that they add real market value (RMV) to the property. Additional value accruing to property to which a qualified alternative energy system is installed due to the existence of such a system is exempt.
(5) Examples of property that typically do not qualify for the exemption include but are not limited to porches, sunrooms, solariums, and greenhouses.


Or. Admin. R. 150-307-0210
RD 2-1988, f. 1-11-88, cert. ef. 1-15-88; RD 8-1991, f. 12-30-91, cert. ef. 12-31-91; REV 10-2002, f. & cert. ef. 12-31-02; REV 9-2008; f. & cert. ef. 9-23-08; REV 3-2014, f. & cert. ef. 7-31-14; Renumbered from 150-307.175, REV 55-2016, f. 8-13-16, cert. ef. 9/1/2016

Stat. Auth.: ORS 305.100

Stats. Implemented: ORS 307.175

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