Appendix B - Methodology in the Report on the Impact of the State-Owned Land PILOT and Solar Taxation Policies on Municipalities

Information about how this study was conducted.

The information and analysis contained in the report come from a variety of sources. Among the most important were the following:

  • meetings with stakeholders;
  • data from a variety of state sources;
  • statutory language, official regulations, and legal decisions;
  • published policy reports from the Office of the State Auditor and other stakeholders;
  • newspaper articles from recent years; and
  • current legislative proposals.

Table of Contents

Meetings with Stakeholders

To further inform our research, DLM talked to various stakeholders such as the following:

  • leadership and staff at the Department of Revenue;
  • leadership and staff at the Department of Conservation and Recreation’s Division of Water Supply;
  • leadership and staff at the Massachusetts Water Resources Authority;
  • executive leadership, assessors, and financial staff from the municipalities of Barre, Charlton, Concord, Hawley, Swansea, and Westborough
  • advocates for municipal finance in the Commonwealth, including nonprofit organizations;
  • advocates for the expansion of solar power in the Commonwealth, including nonprofit organizations and industry representatives; and members of the Legislature.


DLM used various methods to estimate the financial impact of SOL reimbursements to municipalities. We retrieved the following data from the Department of Revenue (DOR) Division of Local Services (DLS):

  • historical appropriations, estimated full reimbursements, and three-year aggregate statewide tax rates for the SOL PILOT Program between FY1996 and FY2020;
  • detailed information on SOL holdings in municipalities as of FY2017;
  • historical SOL PILOT reimbursements, by municipality, between FY2010 and FY2020;
  • detailed SOL data, by municipality, for FY2019 and FY2020, which include SOL values, total acreage, acquired and disposed land acreage, equalized value adjustment ratios, and shares of total land value;
  • historical Watershed PILOT reimbursements, by municipality, between FY2015 and FY2020;
  • detailed watershed land data, by municipality, for FY2019 and FY2020, which include SOL values, total acreage, acquired and disposed land acreage, equalized value adjustment ratios, and shares of total land value;
  • cherry sheet data, by municipality, for FY2020;
  • residential and commercial tax rates, by municipality, for FY2020; and
  • levy and property value data, by municipality, for FY2016, FY2017, and FY2018.

Other SOL resources we used included the following:

  • original statutory language on SOL and Watershed PILOT programs and subsequent amendments;
  • statutory language and regulations on land acquisitions and dispositions;
  • information on Watershed PILOTs released by DCR and the MWRA;
  • a list of all state-owned properties in the Commonwealth, as presented by the Division of Capital Asset Management and Maintenance;
  • reports published by DLM on SOL from 1994 and 2001;
  • a 2017 report on SOL, released by Rural Commonwealth;
  • the 2019 Rural Policy Plan released by the Massachusetts Rural Policy Advisory Commission;
  • news articles on issues regarding SOL; and legislative proposals from the 2019–20 session.

To identify more information about solar facility PILOTs, DLM retrieved the following:

  • original statutory language and regulations on solar facility PILOTs, tax exemptions on solar facilities, and net metering;
  • Informational Guideline Releases and City and Town newsletters from the Department of Revenue;
  • solar facility PILOT agreements between developers and municipalities in Massachusetts, as provided by municipal officials and the Solar Energy Industries Association;
  • ATB decisions on solar installations between 2014 and 2020;
  • news articles about negotiated PILOT agreements, taxation concerns of solar facilities, and solar moratoriums;
  • articles from industry sources about state programs and incentives for solar facilities in Massachusetts;
  • testimony from various advocacy groups about proposals from previous legislative sessions to clarify the solar property tax exemption; and legislative proposals from the 2019–20 legislative session.

Estimated Full Reimbursements for SOL (Figure 9; pp. 27-28).

Between FY1996 and FY2019, the Department of Revenue estimated full reimbursements for the SOL PILOT Program by using a three-year aggregate tax rate. DOR calculated the three-year state average tax rate by dividing the total tax levy of all properties in the Commonwealth (residential, commercial, industrial, open space) by their total value, regardless of whether the municipality had SOL. Because DOR did not calculate a full reimbursement for FY2020, DLM retrieved total values and tax levies for FY2016, FY2017, and FY2018 to calculate the three-year aggregate tax rate, as outlined in the formula below:

(Total Statewide Tax Levy / Total Statewide Assessed Value) * 1,000

After calculating the aggregate tax rate, DLM used the rate to determine what the full reimbursement would be for FY2020 with the following formula:

(Municipality’s SOL Value / 1,000) * Aggregate Tax Rate

DLM also used the funding formula for the Watershed PILOT Program to calculate how much funding the SOL PILOT appropriation needed to provide a full reimbursement to municipalities. DLM retrieved FY2020 commercial tax rates to calculate the total reimbursement for each municipality with the following formula:

(Municipality’s SOL Value / 1,000) * Municipality’s Commercial Tax Rate

There is existing literature that advocated for the use of residential tax rates to calculate reimbursements for the SOL PILOT Program. Therefore, DLM also used FY2020 residential tax rates to calculate potential full reimbursements with the following formula:

(Municipality’s SOL Value / 1,000) * Municipality’s Residential Tax Rate

For these three approaches, DLM calculated shortfalls by subtracting full reimbursements from the existing FY2020 appropriation for the SOL Program. DLM determined shares of full funding by dividing the legislative appropriation by the full reimbursement calculation.

Estimated Hold Harmless Funding for SOL (Figure 14, pp. 34, 38-39).

DLM estimated how much it would cost the Legislature to use a hold harmless provision for existing SOL values and legislative appropriation for FY2020. DLM retrieved PILOT reimbursement data from FY2019 

and FY2020 and calculated the difference in reimbursements. DLM then calculated total hold harmless funding by adding the differences in communities that had drops in funding, which totaled $973,253. This total was adjusted to $971,820 to account for a municipality (Chelmsford) that disposed of land in FY2020.

DLM also calculated estimated hold harmless funding in FY2020 if the SOL formula used other approaches to calculate payments to municipalities (see “Estimated Full Reimbursements for SOL”). DLM calculated differences between actual FY2019 SOL PILOT reimbursements and projected FY2020 reimbursements and then added differences in communities that had drops in funding. In order to cover drops in reimbursements in FY2020, an aggregate tax rate in the SOL formula would need $60,096, a residential tax rate would need $2,018,096, and a commercial tax rate would need $1,959,840.

Estimated Total SOL Value in Massachusetts (Figure 1, pp. 12–13).

DLM retrieved total statewide SOL values for FY2019 and FY2020 from the DLS Municipal Databank. Because statewide SOL values before FY2019 were not available online, DLM calculated values for each fiscal year by using the following formula:

(Full Reimbursement / Aggregate Tax Rate) * 1,000

For example, we calculated the estimated statewide SOL value for FY2018 using this formula:

FY2018 Statewide SOL Value:    ($40,799,438 / $14.98) * 1,000 = $2,723,593,992

Percentage of SOL to Total Property Value (Figure 2; pp. 13–14).

DLM calculated how much SOL value in municipalities was represented in their communities’ total property value. DLM divided SOL value by total property value to determine percentages for each municipality.

Net Change in SOL PILOT Reimbursements (Figures 10 and 11; pp. 29–31).

DLM determined net changes in reimbursements from the SOL PILOT Program by calculating the difference in reimbursements by municipality between FY2015 and FY2020 and dividing the difference by a municipality’s FY2015 reimbursement. DLM constructed a map on Tableau to reflect these changes. East Bridgewater, which had a significantly high reimbursement during this period, was determined to be an outlier and therefore not included in the map. A similar approach was used to calculate net changes for municipalities between FY2019 and FY2020.

Calculating Land Acquisition Impacts to SOL PILOT (Figure 5; pp. 17–18).

DLM made independent calculations for scenarios involving increasing and decreasing SOL values in a municipality, particularly the town of Bridgewater. In order to calculate the effects of a SOL value increase or decrease of $2 million, we performed the following calculations:

  • adding $2 million to (or subtracting $2 million from) Bridgewater’s SOL and the statewide SOL value;
  • calculating shares of the PILOT appropriation for all municipalities by dividing municipal SOL values by the newly calculated statewide SOL value;
  • multiplying the updated shares by the PILOT FY2020 appropriation to determine updated PILOT reimbursements; and
  • calculating differences in funding by subtracting the updated PILOT reimbursement from the original PILOT reimbursement.

Reimbursement Rates for SOL and Watershed Programs (Figure 12; p. 32).

In order to compare rates of reimbursement between municipalities that participate in the SOL and Watershed PILOT programs in Figure 12, DLM used the following formula to calculate rates:

(PILOT Reimbursement / SOL or Watershed Value) * 1,000

The structure of the SOL program allows all municipalities to have the same reimbursement rate ($9.54 per $1,000). The Watershed PILOT’s program structure, which uses commercial tax rates to determine reimbursements and holds municipalities harmless for funding, results in varied reimbursement rates across communities. The SOL reimbursement rate is also used in Figure 13 to determine Hawley’s PILOT reimbursement for newly acquired land.

A complete version of Figure 12 can be viewed below:

Figure 12 - PILOT Reimbursement Comparison (FY2020) – Watershed Communities196

(* = communities with annexed land)



FY2020 Watershed and Annexed Land Value

FY2020 SOL Value

FY2020 Watershed PILOT


FY2020 Watershed PILOT Reimburse-ment (Per $1,000)

FY2020 SOL PILOT Reimburse-ment (Per $1,000)

































































































New Salem*
























































































































West Boylston
















196. Massachusetts Department of Revenue, Division of Local Services. (2020). State-owned land values – FY2020 [Data set]; Massachusetts Department of Revenue, Division of Local Services. (2020). DCR water supply protection land values – FY2020 [Data set]; Massachusetts Department of Revenue, Division of Local Services. (2020). DCR water supply protection annexed land values – FY2020 [Data set].

Help Us Improve  with your feedback

Please do not include personal or contact information.