Solar Panels

A solar panel is an interconnected assembly of solar cells that uses light energy from the sun to generate electricity.

Solar power may be used in small applications to generate heat and/or electricity for personal consumption. In contrast, it may involve an independent developer who operates a large-scale solar development over a large acreage with the capacity to produce electricity in the thousands of kilowatts. Such operations are often referred to as “solar farms,” however they are not considered farmland for assessment purposes and are therefore not assessed as farmland.

Following are frequently asked questions about the assessment of solar panels.

Frequently Asked Questions

I’m having solar panels installed on my roof. Will this affect my assessment?

The addition of solar panels on your rooftop will not affect your property’s assessed value or classification, if they are secondary to the original building and its use. Therefore, your property taxes should not change as a result of having solar panels installed on your roof.

I’m having ground-mounted solar panels installed on my property. Will this affect my assessment?

Your property’s assessed value and classification may change, depending on the generation capacity and location of the installation.

If you are not ordinarily in the business of electricity generation, transmission or distribution, and the generation is secondary to the main activity on the property, the following rules apply:

  • Small-size ground installations, with a generation capacity up to 10 kW, will not see an increase in assessed value or a change in classification.
  • Medium-size ground installations, with a generation capacity over 10 kW and up to
    500 kW, will not see a classification change. The property’s assessed value may increase.
  • Large-size ground installations with a generation capacity of over 500kW will be reclassified in part to the industrial tax class. The property’s assessed value may increase.

If you lease part or all of your property to a corporate power producer (someone who is ordinarily in the business of electricity generation, transmission or distribution), part or all of your property assessment may increase and the portion used in connection with the generation of electricity will be taxed at the industrial rate that applies in the municipality.

Will a solar panel installation on my property affect my property taxes?

MPAC is responsible for assessing and classifying all properties in Ontario in compliance with the Assessment Act and regulation established by the Government of Ontario. Municipalities and taxing authorities in unincorporated areas determine revenue requirements, set property tax rates, and collect property taxes to pay for local services.

A solar panel installation on your property may affect the assessed value and classification of your property. While machinery and equipment used to generate electricity is exempt from property taxes, including the solar panels, the assessed value or the classification of the land used in connection with the generation of electricity may change depending on the generation capacity and location of the installation.  This may affect your property taxes.

If you are not ordinarily in the business of electricity generation, transmission or distribution, and the generation is secondary to the main activity on the property, the following rules apply:

  • Small-size ground installations, with a generation capacity up to 10 kW, will not see an increase in assessed value or a change in classification.
  • Medium-size ground installations, with a generation capacity over 10 kW and up to
    500 kW, will not see a classification change. The property’s assessed value may increase.
  • Large-size ground installations with a generation capacity of over 500kW will be reclassified in part to the industrial tax class. The property’s assessed value may increase.

If you lease part or all of your property to a corporate power producer (someone who is ordinarily in the business of electricity generation, transmission or distribution), part or all of your property assessment may increase and the portion used in connection with the generation of electricity will be taxed at the industrial rate that applies in the municipality.  

Where can I get more information about the property tax treatment of solar installations?

For more information about how solar panels are assessed, please contact us.

Your local municipality is responsible for setting property tax rates and collecting property taxes. Please contact your municipality for more information about how a solar panel installation may affect your property taxes.

The Ministry of Finance also published a Fact Sheet in 2012 following regulatory amendments that were made to Ontario Regulation 282/98 under the Assessment Act.  The purpose of the amendments was to provide greater clarity and introduce new rules governing the property tax treatment of renewable installations.  

Note: The applicable law prevails to the extent there is any conflict between this information and the current law. This information is not intended to provide legal advice and should not be relied upon as such.

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