Bill Eliminating Solar Tax Exemption Goes to Governor’s Desk

OKLAHOMA CITY – Legislation that eliminates the state’s five-year manufacturer ad valorem tax exemption for solar generation and battery storage facilities has advanced to the governor’s desk. 

Senate Bill 237 from Sen. Chuck Hall, R-Perry, and Rep. Mike Dobrinski, R-Okeene, sets a Jan. 5, 2028, sunset date for this tax exemption. 

Hall said this change aligns with previous laws that rolled back tax exemptions for wind energy developments and data centers. The Legislature repealed the tax exemption for wind energy facilities in 2015 through Senate Bill 498 and for data centers in 2021 through Senate Bill 609. 

Many Oklahoma homeowners and landowners who pay property taxes are understandably frustrated by the state’s ad valorem tax exemptions for large, out-of-state corporations, Hall said. 

“At a time when many Oklahoma families are struggling with rising costs, taxpayers should not be forced to subsidize large solar companies through special tax exemptions,” Hall said. “Oklahoma has some of the sunniest skies in the nation and a long history of leading on energy issues, so it’s no surprise solar companies want to invest here. But these out-of-state businesses should be coming to Oklahoma because of our natural resources and business-friendly policies, not because of tax breaks that come at a cost to our residents.”

The Oklahoma Senate gave final passage to SB 237 on Thursday. The bill now awaits action from the governor. 

"Each new energy project should be based on the market opportunity and the return on investment," Dobrinski said. "Tax dollars do not need to be expended on projects when exemptions are not needed to promote investment. We've already removed these exemptions for wind and for data centers. They are not needed for these new solar or battery energy storage systems. I'm glad to see the final version of this legislation pass the Senate, and I'm hopeful it will soon be signed into law."

If approved by the governor, SB 237 would take effect Nov. 1.