South Dakota Senate changes tax structure for solar energy production

Source: By Bob Mercer, State Capitol Bureau • Posted: Sunday, March 6, 2016

South Dakota’s tax structure would change for solar facilities in an attempt to encourage their construction, under a measure that received final approval Thursday from the Legislature.

 The Senate voted 33-1 for the measure, HB 1177. The House of Representatives had earlier approved it 54-15. Its prime sponsor is Rep. Roger Solum, R-Watertown.

The change could be a great economic development tool, said Sen. Ried Holien, R-Watertown. He is the bill’s lead sponsor in the Senate.

South Dakota doesn’t have any solar production now.

Holien said the existing law would have based the tax amount on all of the structure in a solar facility.

That method would charge five times as much as for a solar facility in a neighboring state.

“So nobody wants to build a large-scale solar facility in South Dakota,” Holien said.

The new approach calls for taxing the solar facilities on their production and on the stated production capability.

There isn’t a solar facility in the works for South Dakota at this time but in the future there might be some built, he said.

A similar approach on taxes was taken for wind energy and has been successful, Sen. Scott Parsley, D-Madison, said. He is a retired executive for East River Electric Cooperative that distributes electricity to rural cooperatives.

“The next wave of renewable energy in South Dakota is going to be solar energy,” he said. “This is going to be an integral part of our supply in the future.”

The legislation now heads to Gov. Dennis Daugaard for his review.