April 1, 2021

Virginia Reforms Local Tax Treatment of Energy Storage Projects

HB 2006/SB 1201 and HB 2201/SB 1207
Status: Signed by the Governor

Two bills, HB 2006/SB 1201 and HB 2201/SB 1207, align the tax treatment of energy storage projects between 5 MW and 150 MW with existing Virginia clean energy taxes and ensure that local communities can benefit from energy storage development. Key provisions include:

  • Elimination of sales tax for energy storage equipment;
  • Option to reduce local tax, or replace tax with a fixed revenue share; and
  • Authorization for direct, non-tax benefits to local governments.

The tax reforms provide a less burdensome, simpler, and more transparent local tax regime for energy storage projects as Virginia pursues development of large-scale energy storage to meet its storage target of 3,100 MW by 2035.

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