Victorian landowners with wind farms, solar panels and large-scale batteries could be slugged more tax under changes advocates fear will hinder renewable energy investment.
Sweeping tax legislation before Victorian parliament contains a little-known amendment to the state's Valuation of Land Act.
It would clarify any items fixed to land must be included when assessing its capital-improved value following issues arising from a court decision in October 2021.
The change would result in the value of renewable energy infrastructure assets on land being counted against Victoria's fire services levy, an annual tax paid by property owners via council rates.
Under the plan, the Clean Energy Investment Group forecasts the levy paid by property owners with renewable energy projects could be up to 25 times higher.
It estimates the 1.3GW Golden Plains wind farm near Rokewood, about 40km southwest of Ballarat, would cop a total fire services levy bill beyond $2 million a year, based on the project's $3 billion cost.
That works out to be roughly 10 times higher than the wind farm's current liability and equates to $10,000 for each of its turbines.
The advocacy group's policy director Marilyne Crestias suggested landowners would likely pass on the additional costs to renewable energy generators leasing their land.
"It also might deter investment in Victoria," she told AAP.
"New plants cost more to build because they are in 2023 dollars so they would therefore be valued higher than, for example, a plant that's 10 or 15 or 20 years old that's already depreciated."
The Clean Energy Investment Group has voiced its concerns with the office of Victorian Energy Minister Lily D'Ambrosio and was assured the government is looking into how to resolve the issue.
It wants renewable energy assets to be considered under the levy's public benefit category rather than the industrial classification, which is calculated at a higher rate.
"This would be a similar treatment to some water infrastructure assets such as dams in catchments, which also provide an essential service," Ms Crestias said.
"Investors understand that they need to pay their fair share of the fire services levy but that levy must be set at a rate that is reasonable and proportionate."
A Victorian government spokesman said the proposed change to the Valuation of Land Act reinforced the law's original intention.
"The Allan Labor government leads the nation in supporting the growth of renewable energy to secure a green energy future," he said in a statement.
"We assess proposed amendments throughout the legislative process to ensure they reflect the government's priorities, and that is happening in this case."
The government delayed an upper house vote on the bill earlier this month after failing to secure the support of the opposition and Greens over high-profile plans to expand taxes on empty homes and undeveloped land.
Treasurer Tim Pallas previously said all other changes in the legislation were minor and would have no impact on state revenue.
