Solar Power Companies To Pay County 'Sun Tax'

Riverside County supervisors Tuesday unanimously approved a policy to impose per-acre fees on solar power providers to compensate the county for changes to its desert landscape, the use of local roads and increased burdens on public services.

"Eastern Riverside County is going to look a lot different in a few years. We're talking about a massive change (due to solar developments)," said Supervisor John Benoit, whose district encompasses the region. "This (fee) will give us some small measure in return. I'm convinced it's the right thing to do."

After a four-hour hearing, dominated by residents and solar industry representatives speaking in opposition, the Board of Supervisors voted 5-0 in favor of establishing a $450 per-acre assessment that companies will pay for access to public rights-of-way and for altering desert aesthetics.

County staff had originally proposed a $640 per-acre fee. Industry interests were pushing for a $140 assessment.

"Now is not the time to impose new unexpected taxes, right as solar energy companies are just getting out of the starting gate," said Shannon Eddy, executive director of the Large-Scale Solar Association. "This per-acre fee is not tied to anything ... Your constituents will be paying for this tax in their electricity bills."

Vincent Galati, an attorney for Solar Trust of America, asserted that "99 percent of the property being used for these solar projects is on federal land. You have no right or ability to charge us a fee. The fee should apply to county-owned property. There is a disconnect here."

Blythe Mayor Joseph DeConinck worried that strapping companies with fees would scare them away, putting potential jobs at risk in one of the economically hardest-hit areas of the county. He and other speakers, including International Brotherhood of Electrical Workers Local 440 President Bob Frost, asked the board to consider extending negotiations with the dozen companies with which talks have been ongoing since late June.

But the supevisors refused to entertain further delays.

"Our citizens should be compensated for the ambiance of the desert being forever scarred," said Supervisor Jeff Stone. "The demand for this electricity is being created by the coastal communities. We're sacrificing the desert for the benefit of the coast."

About 20 solar electricity generating projects are planned locally in the next five years.

At the end of last fiscal year, the county Executive Office proposed assessing a 2 percent franchise or development fee that would apply to gross receipts "arising from the use, operation or possession" of a solar project. The idea triggered an avalanche of criticism, with opponents labeling the proposal a "sun tax" and arguing it would encourage renewable energy firms to look to neighboring counties or Arizona and Nevada to do business.

Executive Office officials countered that the fee was nothing new, pointing out that the county has utilized franchise and development agreements as a condition to granting land-use permits to traditional energy providers for a century.

"The amount of land required to operate solar power plants is significantly greater than the amount of land required to operate ... conventional energy facilities," according to a Transportation & Land Management Agency document.

The solar projects planned in the county would take up segments of a 118,000-acre area between Desert Center and Blythe, according to the agency.

"(T)he commitment of so much land to a single use has serious consequences," the document states, noting that the county is growing faster than its neighbors and the solar projects could consume space that might otherwise be used for farming, recreation and housing.

A typical 50-megawatt photovoltaic solar power plant requires 250-350 acres of land, while a gas-fired power plant needs about one-tenth that amount of turf to produce 16 times as much electricity, according to the TLMA.

The county tabled the 2 percent flat assessment in preference to the per- acre fee, charged for each acre used in the power production process and paid annually.

Under the new policy, solar power plants with a capacity below five megawatts will be exempt. There will also be $1,500 annual rebates available for each person hired locally for project construction and $2,500 annual rebates for permanent hires.

The county will slice 5 percent off a company's base payment if it taps existing transmission lines to cut down on blighting and will offer property tax credits and a 10 percent reduction in annual charges for projects that begin before 2014.

A county-commissioned report by David Kolk of Complete Energy Consulting LLC estimated the county would rake in about $160,000 annually -- before rebates -- from a typical 50-megawatt solar provider operating on a 250-acre tract.

Kolk said the cost translates to 1.4 percent to 1.5 percent of total sales revenues. According to the analyst, at prevailing market rates, a 50- megawatt solar energy provider would stand to reap around $10.6 million a year selling wattage to public and investor-owned utilities.

Greg Blue, vice president of Richmond, Calif.-based Sunpower Corp., argued that Kolk's calculations failed to consider changing market conditions that are whacking solar companies' bottom lines. He said the industry is struggling because of decisions in Germany, Italy and Spain to suspend green energy initiatives, making it easier for U.S. utility companies to wrangle cheaper power-purchasing agreements with solar providers.

Riverside County is at the epicenter of a solar power bonanza, largely attributable to the state's mandate that one-third of all electricity generated in California come from renewable sources by 2020.

Board Chairman Bob Buster, along with Stone, noted that if the county fees result in driving companies away, the policy can be changed in whole or in part. --Paul Young, City News Service