Presidio County is continuing talks over another proposed solar plant just east of Marfa.
After months of renewed debate on the future of solar in the county, and a public hearing last week, county commissioners designated the project site a “reinvestment zone.”
That means the county will now begin considering if the plant qualifies for local tax breaks. Late last year, commissioners approved such a break for a similar project from Element Power.
It’s called “Texas Solar Star,” and if constructed, the 50-megawatt plant would be one of the biggest in the state – larger than Austin’s 35-megawatt plant, and a 22-megawatt plant that was set to break ground this month near Pecos.
“We would consider this a substantially-sized project, but it’s certainly not the biggest one we’ve ever built,” says Rob Rogan. He’s the Senior Manager for Business Development at Sun Power.
The company has built solar plants all over the world, including a 250-megawatt project in Southern California.
But Rogan says the one in Marfa isn’t a done deal. He says if the company doesn’t get tax breaks, it might reconsider its plans. He says the project just wouldn’t be profitable.
“Without the county tax abatement, and the school board tax abatement, this project won’t be competitive with other projects,” Rogan says. “Sun Power can’t continue funding development and spending dollars on something we know is not competitive.”
There’s still another round of public hearings and commissioners’ meetings on the schedule before the county decides on any tax breaks. But some new rules on solar property values could complicate the debate.
House Bill 2500 took effect in January. It gives the state new guidelines for deciding how much a solar company’s property is worth.
Before the law was passed, values dropped each year over a few decades. Now, they drop faster, over just 10 years.
That means companies will be paying less taxes on new plants, both to the state and to the counties where they’re built.
Here’s how it breaks down for Presidio County: before the new law, the Marfa plant would’ve paid the county about $10 million in taxes over 30 years. That’s the expected lifetime of the project. Now, Sun Power would pay around $6 million over the same period.
People in the industry say the new law is meant to help bring more solar power to Texas, especially since the state’s political climate hasn’t made that easy.
“It just basically tells the solar industry what the rules are,” says Cynthia Redwine with the Texas Renewable Energy Industries Association.
Redwine says in the past, the laws didn’t say exactly how property values were being appraised, and investors didn’t like that.
“They would have a challenging time doing their financial modeling not knowing how the property might be taxed in the future,” she says. “This bill did not create any sort of new incentive, or tax abatement structure, or anything like that.”
Presidio County Judge Paul Hunt doesn’t agree. He says the new is a “radical change” in the way solar properties are appraised.
Hunt voted against giving the plant its “reinvestment zone” status, but that’s not because he’s opposed to solar. As Hunt sees it, Sun Power is already getting about the same amount of tax breaks from the state as it would’ve from the country before the new law.
And he doesn’t like the idea of giving out more. He’s also worried that incentives from counties aren’t as enticing anymore, and he says that could take away some local bargaining power.
“It’s very likely that they will find the tax break that the state is giving sufficient,” he says, “and they will just cite their projects out here wherever they want to, without any local planning consideration at all.”
Some residents have their own reasons for questioning the plant.
Nearby homeowners like Malinda Beeman worry it could turn their scenic country views into an industrial landscape. At the recent commissioners’ meeting, Beeman suggested the county to offer incentives to solar companies to move far away from towns.
The non-profit Texas Solar Energy Society says it’s not cheap for companies to do that.
Lucy Stolzenburg, with the group, told KRTS the cost of building as you get farther away from town is about a million dollars per mile.
But for now, it’s not likely that Sun Power will find a new home for the plant, as the company focuses on its next move: getting the county to approve those tax breaks.