Renewable Energy Sales and Use Tax Abatement
Administered by Nevada State Office of Energy
This program is not available to residential properties—it applies only to commercial, industrial, agricultural, and utility-scale renewable energy projects in Nevada. If you own a business installing qualifying renewable energy systems (solar, wind, geothermal, biomass, fuel cells, or hydroelectric) with sufficient capacity, you may apply to the State Office of Energy for a sales and use tax abatement that reduces your Nevada tax rate to 2.6% for three years.
Contractors supporting eligible renewable energy projects (minimum 10 MW capacity for electricity generation, or 25,840,000 BTU/hour for solar thermal process heat) should know that project owners can obtain a three-year sales and use tax abatement at 2.6%, reducing their equipment and material costs. Projects must meet strict job creation and wage requirements—including specified numbers of Nevada resident construction workers, hourly wages above state average, health insurance coverage, and capital investment thresholds that vary by county—so early coordination with the State Office of Energy is critical.
This sales and use tax abatement, administered by Nevada's Governor's Office of Energy, reduces the state tax rate to 2.6% for three years for qualifying renewable energy facilities (solar, wind, geothermal, biomass, fuel cells, hydroelectric, or energy storage paired with these systems) meeting capacity and job-quality thresholds that depend on project location. The program requires applicants to demonstrate employment targets, wage floors, capital investment commitments, and health insurance provision; the state has approved 54 projects to date and conducts annual compliance audits post-award. Eligibility excludes residential and government-owned properties.
Program details
- Program ID
- 3233
- Effective
- 7/1/2009
- Expires
- 6/30/2049
- Last updated
- 9/4/2026
Eligibility
- Sectors
- commercial industrial investor-owned utility municipal utilities cooperative utilities agricultural
- Technologies
- geothermal electric solar thermal electric solar thermal process heat solar photovoltaics wind (all) biomass hydroelectric municipal solid waste fuel cells using non-renewable fuels landfill gas wind (small) anaerobic digestion fuel cells using renewable fuels lithium-ion
Program summary
Note: S.B. 448 of 2021 extended this property tax abatement to include energy storage systems paired with eligible renewable energy systems.
New or expanded businesses in Nevada may apply to the Director of the State Office of Energy for a sales and use tax abatement for qualifying renewable energy technologies. The purchaser is only required to pay sales and use taxes imposed in Nevada at the rate of 2.6%. The abatement is valid for three years beginning with the approval of the application.
The abatement applies to property used to generate electricity from renewable energy resources including solar, wind, biomass*, fuel cells, geothermal or hydro. Generation facilities must have a capacity of at least 10 megawatts (MW). Facilities that use solar energy to generate at least 25,840,000 British thermal units of process heat per hour can also qualify for an abatement.
There are several job creation and job quality requirements that must be met in order for a project to receive an abatement. Depending on the population of the county or city where the project will be located, the project owners must:
- Employ a certain number of full-time employees during construction, a percentage of whom must be Nevada residents
- Ensure that the hourly wage paid to the facility's employees and construction workers is a certain percentage higher than the average statewide hourly wage
- Make a capital investment of a specified amount in the state of Nevada
- Provide the construction workers with health insurance, which includes coverage for the worker's dependents
AB 239 (2013) provided additional criteria for considering projects eligible. Note that this exemption does not apply to residential property, or property that is owned, operated, leased or controlled by a governmental entity.
History
This abatement went through significant revisions with AB 522, signed in May 2009. Notably, AB 522 raised the capacity minimum for eligible projects from 10 kilowatts (kW) to 10 MW. It also changed the abatement such that the purchaser is only required to pay sales and use taxes imposed in Nevada at the rate of 2.6 % (effective through June 30, 2011) and at the rate of 2.25 % (effective July 01, 2011 - June 30, 2049), extended it to additional technologies, and increased the qualification requirements to ensure that incentivized projects result in more high quality jobs. These changes took effect on July 1, 2009. AB 522 also created a property tax abatement for renewable energy producers. In 2013, SB 475, a broad tax extender bill, extended the 2.6% tax rate through 2015, and in 2015, SB 483 extended the 2.6% rate indefinitely.
*Biomass is defined as any organic matter that is available on a renewable basis, including, without limitation, agricultural crops and agricultural wastes and residues; wood and wood wastes and residues; animal wastes; municipal wastes; and aquatic plants.
Contact & resources
- Contact email
- info@energy.nv.gov
- Additional resources
Please verify current program details with the administering agency before making any financial decisions.
