Hello Storage! New York State Draft Assessment Model Includes Solar + Storage Category Under Real Property Tax Law § 575-b Methodology

After several years and iterations of the solar and wind assessment model under Real Property Tax Law (“RPTL”) § 575-b, the New York State Department of Taxation and Finance’s 2026 draft assessment model (the “2026 Draft Model”) includes a new category for solar + storage. While some in the solar industry sought to include solar + storage in the assessment model to bring further uniformity and predictability for solar + storage projects, this addition raises a question about whether including hybrid solar + storage projects is consistent with RPTL § 575-b. As discussed below, RPTL § 575-b refers to the definition of solar or wind energy systems in RPTL § 487, and this definition includes energy storage devices. Thus, the inclusion of solar + storage is consistent with the statutory framework. It remains to be seen whether the 2026 Draft Model, if finalized to include solar + storage, will be challenged on this ground or any others. We will separately report on the updates to the 2026 Draft Model as it concerns discount rates, use, and functionality. 

Hodgson Russ Insights

RPTL § 575-b incorporates the definition of “solar or wind energy systems” from RPTL § 487. RPTL § 487(1)(a) defines “solar or wind energy equipment” as including “energy storage devices” and RPTL § 487(1)(a) defines “solar or wind energy system” as an “arrangement or combination of solar or wind energy equipment designed to provide heating, cooling, hot water, or mechanical, chemical, or electrical energy by the collection of solar or wind energy and its conversion, storage, protection and distribution.” Thus, energy storage, when co-located with solar and wind, is incorporated into RPTL § 575-b.

Standalone storage, while also defined in RPTL § 487, is not incorporated into RPTL § 575-b and, for now at least, not part of a mandatory assessment model. These remain subject to the discretion of local assessors and may be subject to assessment challenges for overassessment, particularly where the cost method is used.   

The 2026 Draft Model, including solar + storage, provides developers and assessors a tool to value such hybrid projects, eliminating the uncertainty of the method or value that will ultimately be set by the local assessor. Battery storage is often over-assessed, as many assessors rely upon the cost method to value these projects. New York courts have held that the cost method tends to overvalue properties and have thus limited it to only “specialty properties,” which are unique and lack a competitive market, i.e., they are rarely bought or sold. Matter of Saratoga Harness Racing, Inc. v. Williams, 91 N.Y.2d 639, 642 (1998). If the 2026 Draft Model is finalized and adopted with the contemplated solar + storage addition, it would bring further certainty to how renewable projects will be valued for assessment purposes, resulting in fewer assessment challenges due to inaccurate or non-uniform methods of valuation.   

If you have questions about the 2026 Draft Model or valuing renewable projects generally, please contact Dan Spitzer, Amy D’Ambrogio, or Henry Zomerfeld.  If you received this alert from a third party or from visiting our website and would like to be added to our renewable energy mailing lists or any other of our mailing lists, subscribe here.

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