Battery Energy Storage Systems
Property Tax Treatment
Battery energy storage systems store energy and then release the stored energy to the electric grid.
The taxability of the personal property of a battery energy storage system depends on the way the battery energy storage system is connected to the electric grid. The real property of a battery energy storage system is subject to property tax, regardless of how the system is connected to the electric grid.
Personal property in Minnesota is generally exempt from property tax. There are exceptions to this general rule. One example of taxable personal property is the personal property that is part of an electric generating, transmission, or distribution system.
There are also several exceptions to the taxability of personal property which is part of an electric generating, transmission, or distribution system, including:
- Personal property of a wind energy conversion system, and
- Personal property of a solar energy generating system.
The battery energy storage system is subject to personal property tax if it is part of an electric generating, transmission, or distribution system, unless it is part of a wind energy conversion system or solar energy generating system.
Property tax is determined, in part, on the market value of the property. The county, or local assessor, determines the market value (assesses) for most of the property in Minnesota. The Minnesota Department of Revenue determines the market value of property (assesses) that is part of an electric, light, or power company engaged in the generation, transmission, or distribution of electric power.
The treatment of the battery energy storage systems depends on the owner and the configuration of the system to the electric grid.
For questions on property that is part of an electric, light, or power company engaged in the generation, transmission, or distribution of electric power, contact Revenue’s State Assessed Property Section at sa.property@state.mn.us. For questions on property that is not part of an electric light or power company, contact the county assessor where the property is located.
