Tax revenue from wind, solar projects assists local entities

Environment
Contact(s)

Molly Malone, senior policy associate, mollym@cfra.org, 507.513.8545; Teresa Hoffman, senior communications associate, teresah@cfra.org, 402.687.2100 ext. 1012

CURRIE, MINNESOTA – From direct payments to landowners who host sites to employment opportunities during construction and operation of the systems, wind and solar development bring numerous economic benefits to rural Minnesota counties and communities. 

Additionally, solar and wind systems can provide new tax revenue streams. Two fact sheets recently released by the Center for Rural Affairs provide a breakdown of the taxes typically paid by developers and operators of wind and solar energy projects and show how they are benefiting counties and communities in Minnesota. 

“That revenue helps pay for local emergency services and community and infrastructure improvements and this has an outsized impact on rural counties where the populations are smaller,” said Molly Malone, senior policy associate for the Center for Rural Affairs. 

Tax revenue from wind generation in Minnesota is derived from the state’s wind energy production tax. According to the U.S. Energy Information Administration, wind energy generated 22% of electricity in the state during 2020. The production tax rate will vary by the capacity, with some smaller systems exempt. 

In 2022, 28 counties in Minnesota received $14.1 million in combined revenue from the wind energy production tax, according to the Minnesota Department of Revenue. 

Operators of solar energy systems with a generating capacity greater than one megawatt also pay a production tax, 80% of which goes to the county, with the remaining 20% to the city or township in which the systems are located.

In 2022, 38 counties in Minnesota received almost $2 million in combined revenue from the solar energy production tax. 

The wind and solar production taxes are paid to the owner’s respective county treasurer in May each year. 

To learn more about wind and solar tax revenue in Minnesota, download our fact sheets at cfra.org/publications.

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