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Taxation and Regulation of Solar Energy Projects Under the DRIVE Act

Earlier this month Governor Baker signed “An Act Driving Clean Energy and Offshore Wind”, Chapter 179 of the Acts of 2022. The dual-use solar provisions of the Act limit municipal authority to tax these projects at their full value and restrict their ability to regulate the use of land for such projects. In the context of the Act, dual-use refers to certain qualifying solar projects which are sited on land that is “primarily and directly” used for agriculture or horticulture.

Section 42 of the Act amends Chapter 61A of the General Laws, which provides certain tax benefits to enrolled agricultural and horticultural land. This chapter allows qualifying land to be assessed based on its agricultural value, rather than its potential development value. Previously, the provisions of Chapter 61A only applied to dual-use projects which generated energy exclusively for the use of the farm upon which it was located, limited to projects that produced no more than 125% of the annual energy use of the farm. Now, as long as the qualifying dual-use project “does not impede the continued use of land for agricultural or horticultural purposes”, dual-use land is deemed to be in agricultural or horticultural use, extending the full tax benefits of Chapter 61A to projects of any size, without limitation.

Additionally, the Act changes how towns may apply zoning to dual-use projects. Previously, Chapter 61A provided that such projects “shall be subject to local zoning requirements applicable to renewable energy generating sources.” Now, dual-use projects—if sited on land that is used primarily and directly for agriculture or horticulture—are also deemed to be agricultural or horticultural uses for the purposes of local zoning and subject to the protections afforded to agricultural uses under § 3 of Chapter 40A. Section 3, commonly known as the “Dover Amendment”, limits the authority of municipalities to regulate the use of agricultural land and provides that municipalities cannot prohibit, unreasonably regulate, or require a special permit for the use of land for agriculture or horticulture.

While the new Act will no doubt spur the development of dual-use solar projects, it will do so at the expense of local authority.


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