(South Dakota) Renewable Energy Systems Exemption


In March 2010, South Dakota established a new property tax incentive that replaced two existing property tax incentives for renewable energy. Facilities that generate electricity using wind, solar, hydro, hydrogen generated by another eligible resource, or biomass resources are eligible for this incentive, as are facilities that generate other forms of energy using solar or geothermal resources.

For eligible facilities less than five megawatts (MW) in capacity, all real property used or constructed for the purpose of producing electricity is assessed in the same manner as other real property. However, the first $50,000 or 70% of the assessed value of eligible property, whichever is greater, is exempt from the real property tax. For geothermal systems that produce thermal energy, but not electricity, this exemption is limited to the first four continuous years for residential systems and to the first three continuous years for commercial systems.

Program Overview:
State: South Dakota
Incentive Type: Property Tax Incentive
Eligible Renewable/Other Technologies: Solar Water Heat, Solar Space Heat, Solar Thermal Electric, Solar Thermal Process Heat, Photovoltaics, Landfill Gas, Wind, Biomass, Hydroelectric, Geothermal Electric, Geothermal Heat Pumps, Municipal Solid Waste, CHP/Cogeneration, Hydrogen, Solar Pool Heating, Anaerobic Digestion, Small Hydroelectric, Geothermal Direct-Use
Applicable Sectors: Commercial, Industrial, Residential, Agricultural
Amount: $50,000 or 70% of the assessed value of eligible property, whichever is greater
Maximum Incentive: $50,000 or 70% of the assessed value of eligible property, whichever is greater
Eligible System Size: Less than 5 MW
Authority 1:
Date Enacted:
Date Effective:
SDCL § 10-4-42 et seq.

Colleen Skinner
S.D. Department of Revenue and Regulation
Property and Special Tax Division
445 East Capitol Avenue
Pierre, SD 57501-3100
Phone: (605) 773-5120
Phone 2: (605) 773-6729
E-Mail: colleen.skinner@state.sd.us
Web Site: http://www.state.sd.us/drr2/propspectax/assessor/power_light.htm

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