Qualified Energy Property Tax Exemption for Projects over 250 kW (Payment in Lieu)
Administered by Ohio Development Services Agency and local county commissioners
This program exempts qualified renewable energy projects over 250 kW from Ohio's public utility tangible personal property tax, though you must make an annual payment in lieu of taxes (ranging from $6,000 to $8,000 per megawatt depending on in-state employment levels during construction, with solar facilities at $7,000/MW). You can apply to the Ohio Department of Development for certification by December 31, 2028, and once certified, your project remains exempt as long as you meet ongoing obligations including annual reporting and compliance with job creation, local workforce, and infrastructure requirements.
You can help customers pursue this tax exemption for renewable energy projects over 250 kW by supporting their application to the Ohio Department of Development before the December 31, 2028 deadline; larger projects (20+ MW) require county commissioner approval and agreements for local emergency responder training and roadway repairs. The payment-in-lieu structure ($6,000–$9,000 per MW depending on local workforce percentage and county negotiation) replaces the property tax obligation, reducing long-term operating costs for your customer's facility.
This incentive exempts qualifying renewable energy facilities over 250 kW from public utility tangible personal property tax, funded through annual payment-in-lieu obligations ($6,000–$9,000/MW based on in-state employment during construction and county agreements). Applicants must apply by December 31, 2028; projects 20+ MW require county board approval and compliance with job creation targets, infrastructure repair, emergency responder training (5+ MW), and utility partnerships (2+ MW). The program targets commercial, municipal, cooperative, and utility-scale developers across multiple renewable and alternative energy technologies.
Program details
- Program ID
- 4311
- Expires
- 12/31/2028
- Last updated
- 9/30/2025
Eligibility
- Sectors
- commercial investor-owned utility municipal utilities cooperative utilities
- Technologies
- geothermal electric solar thermal electric solar photovoltaics wind (all) biomass hydroelectric municipal solid waste combined heat & power fuel cells using non-renewable fuels landfill gas anaerobic digestion fuel cells using renewable fuels
Program summary
This program provides owners (or lessees) of renewable energy projects with an exemption from the public utility tangible personal property tax. A person may apply to the director of development for certification of an energy project as a qualified energy project on or before December 31, 2028, for an energy project using renewable energy resources
For Whom
In order to qualify, the owner or lessee subject to sale leaseback transaction must apply to the Ohio Department of Development on or before December 31, 2028 for renewable energy projects.
Large projects (above 20 mega-watts) require approval from each Board of County Commissioners in which the project is located. In addition, these large projects require agreements to train and equip local emergency responders, as well as repair roadway infrastructure following the construction of the project. Small projects (less than 250 kilowatts) are exempt as a matter of law pursuant to Ohio Revised Code Section 5709.53
Benefits
If the project meets the requirements of the exemption, then the Director of Development will certify the project as a "Qualify Energy Project." Qualified Energy Projects will remain exempt from taxation so long as the project is completed within the statutory deadlines, meets the "Ohio Jobs Requirement," and continues to meet several ongoing obligations including providing Development with project information on an annual basis.
How to Apply
Potential applicants should review the revised rules to determine whether they should file an application to become a Qualified Energy Project. Check the Revised Ohio Code and the Ohio Administrative Code.
Payment in Lieu
In lieu of taxes, the following payments must be made to the county where the renewable energy facility is located:
- Solar energy facilities: $7,000 per megawatt (MW)
- All other qualified facilities employing at least 75% Ohio-based employees during construction: $6,000/MW
- All other qualified facilities employing at least 60% Ohio-based employees during construction: $7,000/MW
- All other qualified facilities employing at least 50% Ohio-based employees during construction: $8,000/MW
The property tax exemption must be approved by local county commissioners if the project is 20 MW or larger. Local county commissioners are allowed to require an additional payment as long as the overall payment does not exceed $9,000 per MW. In addition, the law requires that the renewable energy facility 1) meets certain jobs-creation criteria, 2) provides for road repairs (for projects 5 MW or more), 3) provides training and equipment to local first responders (for projects 5 MW or more), 4) establishes partnerships with universities (for projects 2 MW or more), and 5) makes offers to sell the renewable energy credits to Ohio utilities seeking to buy them.
Visit the ODSA web site for additional information, implementation documents, program documents and the application.
*S.B. 232 permanently exempted renewable energy facilities up to and including 250 kW from the public utility tangible personal property tax. See DSIRE entry Qualified Energy Property Tax Exemption for Projects 250 kW or Less for additional details.
Contact & resources
- Contact email
- energy@development.ohio.gov
- Additional resources
Please verify current program details with the administering agency before making any financial decisions.
