2025 Assessment Model Finalized for Solar and Wind Projects in New York: Will Project Tentative Assessments on May 1st be Accurate?

Despite the most recent legal challenge to the State’s assessment model for wind and solar projects (the “Model”), the New York State Department of Taxation and Finance (“DOTF”) finalized the 2025 Model for use this tax year (the “2025 Model”).^[1] Regardless of the court action, the 2025 Model can be used to value solar and wind projects that are one megawatt and larger (and the Attorney General has filed a stay motion that would require the Model’s use, if granted). Under the law, DOTF is required to release updates to the Model only “periodically,” while the discount rates are to be published annually.^[2] However, the structure of the Model effectively requires it be updated annually as it produces a value for only one year.   

Changes reflected in the 2025 Model include (1) revenue forecasts, expense forecasts, and discount rate updates; and (2) wind capacity factors revisions to reflect technology improvements over time. Changes made to the 2024 Model are maintained. For example, real vs. nominal dollars and interest comparison for the cashflow over time, an assumed inverter replacement in year 15 cost, and market transition credits/community credits and community adders defaulting to the highest credit amount unless overridden by the user, are present again in the 2025 Model. If these incentives were not granted to a project, a $0 value should be used, as leaving the box blank will result in defaulted values, resulting in a higher value for the project.  

Accounting for economic fluctuations and inflation (assumed at 2.5%), the pre-tax weighted average cost of capital (“WACC”) is now 9.25% (nominal) and 6.59% (real) for solar and 10.49% (nominal) and 7.71% (real) for land-based wind. This is a slight reduction from the 2024 Model, which used a real WACC of 6.68% for solar and 7.69% for land-based wind. As compared to the 2024 Model, the assumptions used for income and expenses both increased for 2025, with the increase in expenses higher, likely due to economic factors.

Hodgson Russ Insights. For most municipalities hosting renewable energy projects, the tentative assessment rolls are published by May 1st. If a property owner is dissatisfied with the assessment on the tentative assessment roll, they must file a grievance challenging the valuation by Grievance Day. This is typically the fourth Tuesday in May in most jurisdictions outside of New York City. This year, the deadline is May 27, 2025 (the day after the Memorial Day holiday). Failure to file a grievance bars a taxpayer from commencing a lawsuit challenging the assessment or exemption, meaning the valuation will remain unchanged for the current tax year. 

Model Litigation Update. DOTF’s action to finalize the 2025 Model confirms the State’s intention for it to be used for this tax year for tentative assessment rolls. This is particularly notable because of the ongoing litigation of the Model in Donald Airey, et al. v. State of New York, et al. (Albany County Index No. 903991-24), as we first reported in our alert on March 5, 2025.^[3] The State appealed the decision and recently filed a motion with the Appellate Division, Third Department, to request the appellate court either confirm the automatic stay applies to the trial court’s decision or grant a discretionary stay of the decision. Either way, the State wants confirmation that the pre-decision status quo remains and Real Property Tax Law (“RPTL”) § 575-b is valid unless and until the appellate court rules otherwise. Unfortunately, the motion will not be heard until after May 1st, which is the date tentative rolls are published in most jurisdictions. 

Confirm Exemptions. The tentative roll publication is not only important for reviewing the assessment value set for properties, but also to determine if exemptions have been placed. And if so, whether the exemption is valued correctly. If not, the same timing to raise a challenge applies for property tax exemptions. For wind and solar projects, this would be the RPTL § 487 exemption. Those who submitted timely exemption applications by March 1 should review the tentative roll to ensure the exemption is reflected and is valued correctly. 

Those with payments-in-lieu-of-taxes (“PILOT”) agreements under RPTL § 487 that are to be effective this tax year or PILOT agreements with industrial development agencies should also confirm the appropriate exemption is in place. 

Also check land values carefully. A few assessors have escalated land values, but not granted exemptions on those increases even though RPTL § 487 provides an exemption for increase in real property, which is the land and the improvement.^[4] 

Energy Storage Still Excluded. The 2025 Model continues to exclude stand-alone energy storage as well as wind/solar plus storage projects, leaving valuation of these storage projects open to debate and potential challenge.

If you have any questions about the 2025 assessment Model, tax assessment challenges for renewable energy projects, exemptions or PILOT agreements, or about renewable energy projects generally, please contact Daniel Spitzer (716.848.1420), Amy D’Ambrogio (585.613.3955), Henry Zomerfeld (716.848.1370), or a member of our Tax Assessment Practice.

[1] New York State Department of Taxation and Finance, Appraisal Methodology for Solar and Wind Energy Projects, available from https://www.tax.ny.gov/research/property/renewable-appraisal.htm.

[2] See RPTL § 575-b(1-a), (1-b). 

[3] Real Property Tax Law § 575-b Held Unconstitutional by New York Trial Court: What This Means for Assessment of Renewable Energy Projects, Hodgson Russ Renewable Energy Alert, available from https://www.hodgsonruss.com/newsroom/publications/real-property-tax-law-575-b-held-unconstitutional-by-new-york-trial-court-what-this-means-for-assessment-of-renewable-energy-projects.

[4] See RPTL § 487(2).