Taxation of Properties with Solar PV System

The question of property tax changes after a PV systems in installed on your house has never really been clarified by the local or provincial governments. Adding a PV system to your home increases the value of it [assets and potential revenue]. Of course, some may disagree and prefer not to buy a house with panels.
I have not heard of any homeowner facing a property tax re-assessment. But there is good news, released 2 August 2011. The Ministry of Finance has released a proposed regulatory amendment to the Assessment Act to provide greater clarity and certainty to property owners, energy generators, municipalities and the Municipal Property Assessment Corporation regarding the property tax treatment of renewable energy facilities. The proposed policy would apply to electricity generation installations that utilize solar, wind, or anaerobic digestion.
In summary, for roof-top and ground-mounted small scale solar systems:

• Roof-top: The assessment and tax classification of property would not change due to the addition of a rooftop energy generation installation.
• Ground-mounted installations: the property tax treatment will depend upon the size of the facility as well as the entity who is doing the generation - Small-size ground installations (up to 10 kW) would not result in assessment increase or change in tax classification.
• Medium-size ground installations, with generation capacity over 10 kW up to 500 kW, would be taxed based on the surrounding land use (e.g. residential, farm, multi-residential, commercial).

Essentially, a house with a microFIT project would continue to be taxed as a house and not as a business. Also, the house would not be assessed to a higher tax rate due to an increased value.
This is great news - we had wondered all along if our property tax would increase due to our PV system. It would be disappointing if the government paid you to generate renewable energy then turn around and increase your taxes to claw back a part of that revenue. On a small PV system, even a couple hundred dollars would have a large impact on the financial viability of the project [see my recent post]. Secondly, this would act as a disincentive to produce renewable energy - something that is socially beneficial. Thirdly, I have never seen any information from the Ontario Power Authority to say the $0.802/kWhr accounted for increased taxation.
There is more details on wind and larger solar projects that I won't get into here. On Farm anaerobic digestion systems (even systems over 500 kW) are taxed at the farm rate.