James Browne (Wexford, Fianna Fail)
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1. To ask the Minister for Justice and Equality the rateable valuation and calculation method applied to solar panels; and if she will make a statement on the matter. [24447/16]

Frances Fitzgerald (Dublin Mid West, Fine Gael)
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The Commissioner of Valuation is independent in the exercise of his duties under the Valuation Acts, 2001 - 2015 and the making of valuations for rating is his sole responsibility. The statute does not accord me as Minister any function in this regard.

The basic premise under the Valuation Acts is that all interests including buildings and lands used or developed for any purpose (irrespective of whether such lands are surfaced) and any constructions affixed thereto are rateable unless expressly exempted under Schedule 4 of the Acts. Schedule 3, paragraph 1(m) of the Acts specify that electricity generating stations, including where appropriate, all buildings and structures thereon which include solar panels, are rateable.

Solar panels, whether affixed to the roof or other external surface of a commercial or industrial building or existing quite independently as "solar farm" type installations are rateable structures. In the case of panels affixed to buildings, they form part of the building valuation itself and in the case of solar farms, they form part of the valuation of electricity generating stations as defined under Schedule 3, paragraph 1(m) of the Valuation Acts 2001 to 2015.

The basis of rateable valuation for all property including solar farms is "net annual value" and is set out in Part 11 of the Valuation Act 2001. Net annual value is the rental value for which one year with another, the building might, in its actual state, be reasonably expected to let from year to year, on the assumption that the probable average annual cost of repairs, insurance and other expenses (if any) that would be necessary to maintain the property in that state, and all rates and other taxes in respect of the property, are borne by the tenant of the property.

In accordance with the legislation, well-established valuation principles and case law arising from the independent Valuation Tribunal and the higher Courts, various methodologies may be used in estimating the net annual value (NAV/rental value) of a rateable property. The most common methodology used is the "comparative" method which, as the name implies, employs direct comparison with other similar properties in the same rating area. In the absence of direct comparative evidence of value, two other methods may be used. The first of these is what is known as the "receipts and expenditure" method of valuation where trading accounts are analysed to arrive at the rent which a hypothetical tenant might be reasonably expected to expend for the property. Another method of valuation used from time to time, depending on the particular circumstances and type of property involved, is the "contractor's" method where the notional cost of construction, allowing for depreciation as appropriate, and the value of the site are used to arrive at the net annual value. This is provided for in Section 50 of the Valuation Act 2001, as amended by the Valuation (Amendment) Act 2015.