Officials: Solar takes farmland, evades fair tax share
Accomack County officials are seeing red over green energy.
State laws exempt solar projects from paying all or most of their taxes on machinery and equipment. Lawmakers hoped the tax breaks, approved in the 2014 and 2016 legislative sessions, would help attract more solar energy developers to the commonwealth.
They have. Between August 2015 and last July, companies submitted 19 applications for solar farms across the state, according to one analysis.
Two are under development on former farms in Accomack.
A facility spread across some 1,000 acres of land near Oak Hall is scheduled to begin operation by the end of October, generating 80 megawatts of energy for Amazon.com's cloud-computing subsidiary. Plans for a second, which would produce 20 megawatts on 174 acres near Tasley, are set to go before the planning commission Oct. 12.
READ MORE: Accomack approves a huge solar facility.
A proposal being considered by the county's Board of Supervisors, though, could make it much harder for solar farms to get built in the future.
The measure would bar the energy projects from lands in agricultural zones. That would rob solar developers of their preferred land-use type for building. The recipe for catching rays, after all, is flat, cleared land.
As board members see it, they don't have much to gain from allowing solar development — but much to lose.
The new state incentives mean the projects aren't paying their fair share in local taxes, several members said at their September meeting. And the transformation of crops into photovoltaic cells may accelerate the loss of farmland, they fear.
“This is a horrible public policy by the state," Supervisor Grayson Chesser said. "What you’re doing is you’re trading food for energy, and it’s a bad trade."
The developer of the Tasley project disputes the notion that solar farms will be a net loss to the county.
The typical farm is 342 acres in Accomack and pays $5,692 a year to the county in machinery and equipment taxes, SunTec Solar Solutions said in its application. Although a solar farm would pay nothing toward that tax category, it would be "more than offset" by additional real estate taxes. The company estimates the property tax bill will grow five-fold, providing a net gain of about $15,000.
It won't cost the county very much to provide services to the project beyond fire protection, said Steve VanKesteren, one of project's landowners. And once built, it will represent just 0.25 percent of the county's total farmland, according to the company's application.
“It’s only a real small percentage of land being put into energy. It’s not like people are going to starve because of this solar project," he said.
Accomack isn't the only rural Virginia county debating the worth of solar development.
In March, the Northampton Board of Supervisors approved Hecate Energy’s permit to construct a solar facility on about 185 acres northeast of Eastville off Seaside Road. The approval came after Hecate agreed to pay a $200,000 lump sum to the county before it gets building.
BACKGROUND: New solar project going up in Northampton
Similar arguments flew back and forth in Southampton County, where a developer had proposed what stands to become the largest solar facility in the state. Its top board approved the 100-megawatt project after a 4½-hour meeting that began Sept. 26 and ended shortly after midnight Sept. 27, according to The Tidewater News.
Virginia has been slow to roll out the regulatory red carpet to the solar industry. The state received a "D" grade for its "solar-friendliness" last year from the advocacy group Solar Power Rocks. By the end of 2015, its 22 megawatts of solar-generated power in operation ranked 32nd in the country, according to the Solar Energy Industries Association.
In 2014, the state made changes, passing an exemption for machinery and equipment taxes on facilities producing 20 megawatts of electricity or less. Lawmakers earlier this year passed a law that phases out the full exemption for 20-megawatt facility by the end of 2018 but extends an 80 percent exemption on facilities above 5 megawatts starting Jan. 1, 2019.
In Accomack, officials unanimously approved what became the Amazon solar facility in January 2015, a deal that included several financial incentives for the county. It included the promise of a $100,000 annual real estate tax floor on the property, an offer of $100,000 to equip a county building with solar and $100,000 to clean up derelict properties around the project.
But concerns about the tax break lingered long after ink dried on the agreement.
Since the solar farm was too large to qualify for the existing full exemption available to 20-megawatt facilities, its original developer, Community Energy Solar, proposed carving it into four separate, 20-megawatt projects. To the relief of Accomack officials, state regulators rejected the company's tack, requiring it to pay full freight on its taxes.
Last year, Rich Morrison, the county's planning director, assured the planning commission that further large-scale solar development seemed unlikely.
Accomack's machinery and equipment tax rate of $3.72 per $100 is high enough to discourage companies from building projects of greater than 20 megawatts, he said at the time. By contrast, the rate in the state of North Carolina is about 34 cents per $100.
Enter SunTec. The arrival of its state solar application revived conversations about the tax exemption. The planning commission has devoted parts of four meetings to the topic this year, including a board field trip to the Amazon site.
“When you view the thing, it’s pretty stark," Morrison told supervisors recently. "It’s a big thing, and it’s a big change to the scenery up there.”
READ MORE: Worcester County begins solar co-op program
The planning commission's main recommendation is to remove solar facilities as a so-called "conditional use" in agricultural districts. If it takes effect, solar developers would be restricted to building in general business and industrial areas. To grow solar panels on agricultural lands, they would have to get the tract rezoned.
That may be fine for the few decades that the solar facilities are in use, but what happens afterward? asked Matthew Meares, a solar industry consultant based in Richmond. Changing the zoning in the middle of agricultural area could lead to the development of heavy industry and other out-of-place developments down the road, he said.
Property owners should be allowed to do what they want with their land, whether it's a solar farm or a food farm, Meares added.
“If the landowner wants to do it and it’s economically beneficial to the landowner, who are we to trample on the property rights of the landowner?" he asked.
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