by James A. Bacon

Back in April, John VanKesteren told the Accomack County Board of Supervisors that he and his family wanted to build an 80-megawatt solar facility on their family farm. The 200-acre site they had selected was an ideal location: less than 1,000 yards from a power station. The family, organizing under the name of SunTec Solar Solutions, had aspirations of landing a $100 million solar energy project.

One might think that the community would embrace a project that would create wealth for local landowners, generate a slew of construction jobs, and increase the tax base of the economically depressed Eastern Shore county. But local planners and supervisors weren’t entirely pleased. They saw a solar facility conflicting with the agriculturally zoned use of the land.

“There’s a contradiction between agriculture and solar,” said Rich Morrison, the county’s planning director, in a report to the Board of Supervisors in September, according to Delmarva Now. “It’s basically pick one. You’re either picking solar or you’re picking ag. … They haven’t found a place to coexist.”

Last month the Board approved a planning commission request to start preparing an ordinance amendment that would remove utility-scale solar and wind farms from the county’s Agricultural Zoning District, severely limiting the potential to develop renewable power sources in the county.

One of the reasons cited for the amendment was a 2016 state law that provides tax exemptions on real and personal property, including equipment, for solar farms up to 20 megawatts in size. While the measure improves the economics of solar from the developer’s perspective, it undermines the economics of taxation from a county government perspective.

“It’s a different game with the ruling of the state and not being able to tax that property,” said Board Chairman Ron S. Wolff in the September board meeting. “That would’ve made a big difference in how I would’ve looked at it.”

Land-use conflicts may become more frequent in Virginia as the state energy mix shifts increasingly toward utility-scale solar, the most economically efficient way of producing solar electricity. Solar panels will consume thousands of acres of land just to provide the modest amount of electricity contemplated under the state’s current energy plan — and far more if Virginia were to meet the ambitious goals of environmentalists who want to clamp a lid on gas- and nuclear-fueled energy. While it may be theoretically possible to retrofit solar panels on building roofs, ease of construction favors utility-scale construction of long banks of solar panels on inexpensive farmland .

The problem is that in rural counties like Accomack with abundant farmland, that land is zoned agricultural, and local governments are the ones who define whether “agricultural” uses include solar. If solar facilities are mostly tax-exempt, local governments could perceive solar farms a revenue loser, not a winner.

The bill (HB1305) signed by the governor “provides a sales and use tax exemption for machinery, tools, and equipment of a public service corporation used to generate energy derived from sunlight or wind. The bill also … exempts from such [real and personal] property taxes 80% of the assessed value of such equipment used in projects equaling more than one megawatt.”

Dennis Nordstrom, a SunTec shareholder, argued that the two uses can coexist. Only 174 acres of the 200-acre site actually would be developed, and solar planels would occupy only 30% to 40% of available space. SunTec proposes partnering with Shooting Point Oyster Company to bring a flock of Hog Island sheep to graze among the panels, similar to what solar farms are doing in North Carolina. That way, the solar farm doubles as a sheep farm and preserves the agricultural use.

Nordstrom also says that the solar farm would yield higher tax revenue, even taking the tax exemption into account. Writes Delvmarva Now:

Based on recent real property tax bills for SunTec’s proposed site, the county received about $5,500 from the land annually, [Nordstrom] said. Switching to a mixed-use solar farm would bump that number to around $26,000 per year, based on the same value per acre the county assessor’s office gave to Accomack’s other solar project, in Oak Hall Nordstrom said.

“The county was a little bit upset, and I can understand this, because they (the state) basically took over their power of taxation,” he said.

However, as Nordstrom sees it, Accomack could garner an additional $15,000 annually from a mixed-use solar and sheep farm, versus a traditional agricultural site — around $375,000 over the solar farm’s 25-year lifespan.

Bacon’s bottom line:

Clearly, tax subsidies had consequences that solar advocates did not anticipate. If Accomack’s Board of Supervisors ends up removing solar from the list of agricultural uses, solar energy in Virginia will be dealt a significant blow. If other counties adopt Accomack’s logic, the result could be disastrous. Assuming Accomack moves ahead as planned, the General Assembly should consider amending the legislation again. Gaining access to agriculturally zoned lands is more important to advancing the cause of solar in Virginia than the exemptions on sales and property taxes.