Program Overview
| Feature | Details |
|---|---|
| Tax Rate | $7,000 per megawatt for most facilities, $2,000 per megawatt for facilities in Opportunity Zones |
| Duration | 20 years |
| Qualifying Facilities | Land improvements used exclusively for solar energy generation (excluding buildings) |
| Approval Process | Two-step discretionary approval by local governing body and State of Michigan |
| Location Requirement | Must be within a designated solar district in Michigan |
Summary of Benefits
- For Developers: Predictable tax payments and significant cost savings enhance project viability, especially in Opportunity Zones
- For Communities: The program ensures transparency in assessments, boosts local economies, and supports environmental goals by reducing the carbon footprint
Creating Win-Win Scenarios: Overcoming Challenges Together
Bringing together the benefits for developers and the community to create win-win scenarios involves navigating several challenges. Developers need to ensure their projects are financially viable and aligned with community goals and regulatory requirements. Here are some common challenges and how DMA can help overcome them:
- Navigating Local Approvals: The two-step discretionary approval process requires careful navigation of both local and state bodies
- Strategic Alignment: Aligning your project with local economic goals to gain support from governing bodies
- Modeling Potential Impact: Accurately modeling the financial impact of the incentives on your project, which can be challenging without expert knowledge and tools
- Compliance: Ensuring that all documentation is thorough and compliant with both local and state regulations
How DMA Can Help
DMA’s team of economic development and renewable energy experts has extensive experience working in Michigan, ensuring smooth navigation through the approval process. Our experts handle all aspects of documentation and compliance, ensuring that your project meets all local and state requirements. We work directly with local and governing bodies to ensure support for the passage of the PILOT, aligning your project with community economic goals. Additionally, DMA specializes in modeling the potential impact of incentives and providing accurate tax forecasting, helping you maximize your tax savings and project viability.
By leveraging DMA’s expertise, developers can confidently pursue solar projects that not only benefit their bottom line but also contribute positively to local communities.
| This website content should be used for general informational purposes only, and not as a substitute for consultation with professional tax, legal, or other competent advisors. Before making any decision or taking any action based upon information contained on this website, you should consult with a DMA professional. |
Ready to Maximize Your Solar Investment?
Contact DMA’s Credits & Incentives team to explore how you can benefit from this incentive. Our experts will guide you through every step of the process, helping you navigate challenges, model the financial impact, and optimize your project’s financial outcomes.
The Michigan Solar Energy Facilities Tax Exemption offers significant opportunities for renewable energy developers and local communities. By establishing a Payment In Lieu of Taxes (PILOT) structure, this program creates a predictable and advantageous tax environment for solar developments. With a fixed fee based on the nameplate capacity of the solar array, developers can easily forecast future tax payments and achieve substantial savings over the project’s life.
This article examines how effective navigation of the program can drive business growth for solar developers while fostering job creation and community investment, resulting in win-win scenarios for both parties.