In some states, adding significant improvements to the farm, such as an anaerobic digester and associated equipment, would significantly increase the value of the farm and the property tax liability of the farmers. By establishing a property tax exemption for the value added to property by waste-to-energy systems, states could remove a barrier preventing adoption of the technology on local farms.
Some states have a similar property tax abatement for solar photovoltaic (PV) installations. The abatement excludes a portion of the value of a residential PV system from property tax assessments. This tax abatement and other solar-friendly programs have contributed to the exponential growth of the solar PV industry in those states. Currently, thirty-eight states in the country have renewable energy property tax abatement laws that incentivize growth across multiple industries.
State policymakers could extend property tax exemptions to include all properties installing new biogas or waste-to-energy equipment. The legislation could provide fifteen to twenty years of abatements in order to give farmers and developers the certainty and stability they need to invest in projects. By reducing the additional costs of installing this technology, states can incentivize new investment and remove barriers for adopting biogas technology on farms throughout the state.