Solar projects have a significant positive impact on local economies, particularly through increasing tax revenues and related economic benefits.
Tax Revenue Contributions
- Solar farms contribute substantially to local governments’ tax bases primarily through property taxes and sales taxes generated by solar project construction, operation, and maintenance.
- For example, a report on Washington state’s community solar projects estimates that developing 500 MW of solar capacity would generate $76 million in state tax revenue while also creating 16,521 job-years of employment.
- Local governments benefit from increased income as solar projects expand, providing stable sources of tax income that support public services and infrastructure growth.
Broader Economic Impact Supporting Taxes
- Solar projects stimulate broader economic activity by creating jobs—solar energy produces over four times more jobs than many traditional energy sources—which leads to greater local spending and income generation, indirectly boosting tax revenues.
- A 5 MW community solar installation can bring roughly $14 million in economic activity to the local community and support about 100 jobs, leading to increased incomes and expenditures that further enhance tax income for local governments.
- Several states show projected billions in economic activity and thousands of jobs from solar development, implying strong local tax base expansions. For instance:
- Pennsylvania: $1.8 billion and 11,000 jobs
- California: $12 billion and 25,000 jobs
- Wisconsin: $2.8 billion and 18,000 jobs
- Virginia: $5.6 billion and 46,000 jobs
- Ohio: $5.57 billion and 27,000 job-years
- New Mexico: $517 million and 3,760 jobs
Summary
Solar projects enhance local economies by directly increasing tax revenues through property and sales taxes and indirectly by generating local jobs, boosting incomes, and stimulating economic growth which all contribute to a stronger local tax base. Community solar projects provide a clear economic stimulus, creating millions to billions in economic activity and tens of millions in tax revenues for states and localities.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/how-do-solar-projects-affect-the-local-economy-in-terms-of-tax-revenues/
