PROVIDENCE — With the help of some last-minute maneuvering in the Senate, legislation that would ease the tax burden on big solar projects that are primarily being built in rural Rhode Island won approval on the final day of the General Assembly session. 

Passage of the bill late Thursday night occurred in the face of opposition from municipalities that argue the measure gives preferential treatment to renewable energy, specifically the commercial-scale solar projects that use ground-mounted panels and can cover dozens of acres. The Rhode Island League of Cities and Towns says the change will mean other residents and businesses will be responsible for the lost tax revenues that will result. 

Approval also came despite the bill being narrowly rejected on the first go-round by the Senate Committee on Housing and Municipal Government. But after the committee voted down the Senate version on Tuesday, an identical bill that passed the House was put on the agenda of the Senate Committee on Judiciary.  

Senate President Dominick Ruggerio and others in Senate leadership were present for the vote, assuring the bill got through the committee. Hours later, the bill passed the full Senate on a 28-10 vote. It’s now set to go to the governor’s desk for his signature. 

When he was asked before the vote why it was important to rescue the measure, Ruggerio said that “taxing solar farms at a higher rate may discourage their development.” 

In a statement, he said: “Solar farms are passive and, unlike many other types of businesses, they do not represent any increased burden on local municipalities."

The legislation is just one of several measures that have been introduced in the General Assembly in recent years to benefit solar developers. They’ve included multiple attempts to shift some of the costs of connecting projects from developers to ratepayers, most recently in the original version of a bill introduced this year; and efforts to expand an incentive program that regulators and advocates say has had unintended negative consequences for customer bills and the environment. 

Opponents of the bills have raised concerns that policymakers are easing the path for solar projects in rural areas that often require forest clearing without guidelines to protect green space that has habitat value and serves as a carbon sink, among other environmental benefits.

Of the 1,893 acres of forest cleared for a different land use since 2018, 1,282 acres were cleared for solar development, or 68 percent of the total, according to the Department of Environmental Management.

“The local municipalities are getting trampled by the laws that we’re creating up here,” Sen. Gordon Rogers, a Republican who represents parts of western Rhode Island where projects proliferate, said before voting against the bill in committee. 

Supporters of the bill, however, say it will bring uniformity to the tax regime for solar projects. State regulations currently set the taxation rate for renewable energy projects at $5,000 per megawatt of capacity (one megawatt requires about 4 to 6 acres of land), but nothing in those rules stops communities from taxing the land upon which those projects are located. 

In testimony in the House, Helen Anthony, a Providence City Council member who works as a land use attorney for solar developers, pointed to a project in Hopkinton as an example of how this can play out. The 10.63-megawatt project is billed $53,100 in tangible taxes on its renewable energy equipment. In addition, the project is billed another $52,176 in property taxes by the town for the 67 acres on which it sits. The town, Anthony said, came up with the latter figure after calculating a 17-fold increase in the assessed value of the land when the project was built. 

She said the firm for which she works, Handy Law in Providence, has 17 tax appeals pending in Superior Court and one in the state Supreme Court.  

Nicholas Nybo, a lawyer for Warwick-based Revity Energy, told a similar story in his testimony in support of the bill. 

“Whether these re-assessments are being used to produce a budget windfall or being wielded as a cudgel to ward off future developers (or both), they inject uncertainty and instability into the development process and are a significant hindrance to continued development in the State,” he wrote. 

He and other supporters of the bill say it does not prevent cities and towns from negotiating agreements with developers to pay more than the standard tangible tax rate. Such agreements are preferable to paying property taxes because they give certainty to the developer and the municipality, Nybo said. 

But the League of Cities and Towns has stated that levying a tangible tax and property tax is not unusual for other commercial operations. And it argues that it’s reasonable for communities to assess higher property taxes once solar projects are built because the value of the land does increase.  

The Hopkinton Town Council agrees. 

“Changes in the zoning of properties to accommodate solar development created a new and very valuable use and the properties should be assessed as such,” the council wrote in a letter of opposition. 

Legislators, though, do not see it that way. 

“What this will do is ensure we have a standard approach that is equitable and fair across the entire state,” said Sen. Louis DiPalma, a Middletown Democrat who sponsored the Senate bill.