Property Valuation for Commercial Wind Energy Equipment
Administered by Illinois Department of Commerce and Economic Opportunity
This incentive does not apply to homeowners; it only covers commercial wind farms larger than 500 kW producing power for commercial sale. If you own a utility-scale wind project, your equipment will be assessed at a standardized value (currently $119,988 per MW after the state's one-third assessment ratio) rather than its full fair market value, reducing your property tax burden while accounting for age-related depreciation.
You serve clients developing commercial wind projects that benefit from predictable, standardized property tax valuations across Illinois counties. The law values turbines over 500 kW at $360,000 per MW (adjusted annually by the state's trending factor—1.52 for 2024 assessments), with the assessed value set at one-third of that figure; physical depreciation is calculated by dividing turbine age by 25, capped at 70% of the trended basis. This uniform statewide approach eliminates the previous county-by-county variations that could swing tax liability by 75%, making multi-county projects more predictable.
Illinois assesses commercial wind devices (≥500 kW for commercial sale) using a fixed statutory value of $360,000/MW, inflation-adjusted annually via a trending factor published by the Department of Revenue and applied uniformly across all counties. The assessed value is one-third of the trended real property cost basis; physical depreciation is (turbine age ÷ 25) × trended basis, capped at 70%, with potential additional allowances for functional or external obsolescence. This mechanism, established by P.A. 095-0644 (amended 2010), applies to commercial, industrial, utility, municipal, cooperative, and agricultural wind installations, ensuring consistent valuation and tax treatment statewide.
Program details
- Program ID
- 2767
- Effective
- 1/1/2007
- Last updated
- 10/15/2024
Eligibility
- Sectors
- commercial industrial investor-owned utility municipal utilities cooperative utilities agricultural
- Technologies
- wind (all)
Program summary
Note: The Trending Factor used for Assessment Year 2024 is 1.52.
In October 2007, Illinois passed Public Act 095-0644, providing consistent valuation procedures for commercial wind farm equipment (amended via H.B. 4797 in 2010). Beginning in the 2007 assessment year, wind energy devices larger than 500 kilowatts (kW) and producing power for commercial sale will be valued at $360,000 per megawatt (MW) of capacity, annually adjusted for inflation according to the U.S. Consumer Price Index; the Department of Revenue annually publishes this adjustment ("trending factor"), available here. This figure is termed the trended real property cost basis. Because Illinois assesses property for property tax purposes at one-third of its fair cash value, in practice the assessed value of commercial wind energy property is $119,988 per MW.
The law also defines an allowance for physical depreciation of the device, calculated by dividing the age of the turbine by 25 and then multiplying the result by the trended real property cost basis. The physical depreciation allowance may not exceed 70% of the trended real property cost basis, though additional depreciation allowances may be granted for functional or external obsolescence.
Background
Prior to 2007, wind energy devices generating electricity for commercial sale were assessed differently depending on where they were located. Some counties valued the entire turbine structure (tower plus generation equipment) as "real property", subject to taxation, while others deemed only the tower portion as taxable property. This difference in valuation procedure meant that the taxable value of identical wind turbines could vary by as much as 75% from county to county, creating dramatically different tax loads and complicating projects that cross county lines.
Contact & resources
- Contact email
- wayne.hartel@illinois.gov
- Additional resources
Please verify current program details with the administering agency before making any financial decisions.
