ECONOMIC BENEFITS TO HOST COMMUNITIES: Summary of Key Takeaways

Our analysis indicates that, considering both distributed solar and large-scale renewables deployment, local jurisdictions across the State could receive $116 million to $348 million more in the net present value of PILOTs over project lifetimes if renewable energy tax standardization is adopted. The increase in tax payment receipts is driven by the additional deployment of renewable energy that will be achieved by 2030 if the barrier to negotiating PILOT agreements is mitigated.

Further, the State could see 12,300–20,600 additional jobs by 2030 resulting from increased renewable energy deployment under tax standardization. These include direct, indirect, and induced jobs. Total business sales could increase by $6.9 billion to $11.6 billion and gross state product could increase by $3.9 billion to $6.5 billion if tax standardization is adopted. This activity will benefit a range of industries as developers, their suppliers, and employees spend money on goods and services throughout the economy.

Differential Impacts to Distributed Solar and Large-Scale Renewables

In the distributed solar segment, the total cumulative deployment by 2030 is 25% higher in the Tax Standardization case than under the Status Quo. The total statewide cumulative deployment for large- scale renewables under tax standardization is 32% higher than the Status Quo – Base Impacts scenario. Property tax standardization may have a larger impact to the large-scale renewables segment because:

• Large-scale project developers were more likely to indicate that challenges with PILOT negotiations could lead to the project’s cancellation than distributed solar developers, who indicated that the negotiations could slow down projects and draw development resources away from other projects, but were not very likely to lead to a project’s cancellation. The differences stem largely from the drivers of development, as described below, and availability of suitable project sites. While distributed solar developers note that they typically avoid development activities in communities that are known to require full taxation or pursue high PILOTs, large-scale wind and solar projects are more constrained by site suitability and resource availability when selecting project sites.

• Large-scale renewable developers expected longer lags resulting from PILOT negotiations (or alternatively, greater acceleration in project timelines should tax standardization be adopted) than distributed solar developers. Project delays in either segment could cause attrition if the delay results in losing tax credit qualification or capital equipment pricing; in the LSR segment, delay poses the additional risk related to limits on how long a project can extend its contractual COD milestone obligations.

• Large-scale renewable projects in New York compete on price for REC contracts, and therefore can be highly sensitive to increases in project costs. The resolution of a property tax or PILOT obligation at a value higher than estimated, or an inability to reach a resolution on a PILOT value, may make a project unfinanceable.

• The stakes for the taxing jurisdictions on large projects may be higher because larger projects have more visibility and a larger impact to host communities. Local elected officials and representatives may have a different stance than project developers on what is reasonable for a PILOT or Host Community Agreement deal; with higher stakes, the parties may find reaching a negotiated resolution more challenging.