Solargen Energy officials who are proposing a 30,000-acre solar
farm in the Panoche Valley have acknowledged a full spectrum of
tax-exemption laws work heavily in their favor, part of a federal
push to catapult such alternative energy projects into fruition.
Solargen this week sent a letter notifying county officials it
would be willing to pay all of the local property taxes from which
the company is exempt, confirmed Eric Cherniss, Solargen’s vice
president of project development.
HOLLISTER
Solargen Energy officials who are proposing a 30,000-acre solar farm in the Panoche Valley have acknowledged a full spectrum of tax-exemption laws work heavily in their favor, part of a federal push to catapult such alternative energy projects into fruition.
A state law in particular prohibits counties from levying most categories of property taxes – including on business equipment such as solar panels – against companies like Cupertino-based Solargen, whose officials have estimated capital costs on the project could exceed $4 billion.
In attempting to incentivize rapid movement on such large-scale projects, however, the state code has offered little motivation on the back end for local jurisdictions – communities such as San Benito County being asked to sacrifice an expansive viewshed while providing the necessary infrastructure, services and staff time to get a solar farm built and running.
It has potential to create a line in the sand during negotiations between Solargen and county officials. Knowing that, Solargen this week sent a letter notifying county officials it would be willing to pay all of the local property taxes from which the company is exempt, confirmed Eric Cherniss, Solargen’s vice president of project development.
Under the law, if the project goes forward, Solargen would have to pay limited property taxes on the land and personal property such as buildings, San Benito County Assessor Tom Slavich explained. The county also could tax Solargen’s energy transmission lines and piping, but the company would receive a 75 percent exclusion on such property under the law, Slavich said.
Solargen, though, would be exempt from paying taxes on its business equipment, which has by far the most potential to generate local revenue.
Cherniss estimated additional tax revenue from the Solargen property under such an arrangement would come to about $30 million over the next 20 to 25 years. Though company estimates are somewhat preliminary, Solargen’s chief executive officer has estimated it could generate $8 billion or $9 billion in revenue over the project’s scheduled life.
Cherniss said Solargen, which also submitted its conditional-use permit this week, wants to “make sure the county isn’t losing money” over the proposal.
“We’re going to pay the county what they would have received,” Cherniss said.
Cherniss even said the state law offers a disincentive – by disallowing most property tax assessments – for communities such as San Benito County. He noted how the state program running through 2016 exempts companies such as Solargen from property taxes for five years, a period during which an allowable depreciation of assets would result in essentially no revenue gain on that end for the county.
For the full story, pick up a copy of the Free Lance on Tuesday.
