Change in solar array taxes costs towns
NEW HAVEN — Drive from Vergennes to Middlebury along Route 7, and you won’t go more than a few miles without seeing a solar array. As towns like New Haven are deluged with proposals for new solar arrays, citizens and town officials are wondering, “What’s in it for us?”
A law enacted by the Legislature this past spring decreased the amount of property taxes towns can collect from the owners of big solar farms, and some New Haven residents fear their town will soon lose some of its most valuable assets — unblemished views of the Champlain Valley.
New Haven town officials are also concerned that they have little say about where projects are sited, or how large they are.
Like all private property in the state, the land on which solar arrays sit is taxed based on its value by both municipalities and the state education fund.
Solar arrays themselves are taxed through a separate state statute. For the state education fund, arrays larger than 50 kilowatts are taxed at $4 per kilowatt hour. Thus, the 2.2-megawatt Cross Pollination array off Route 7 in New Haven, the largest presently in the town, pays $8,800 annually in school taxes.
Municipalities levy taxes on solar arrays on the income they generate, based on the rate utilities pay solar farm owners when power flows from solar panels onto the electrical grid.
In order to spur the growth of solar power and move toward the goal of Vermont getting 90 percent of its electricity from renewables by 2050, the Legislature this year amended the way towns collect taxes from solar arrays. SunCommon on Wednesday will hold a press conference with Gov. Shumlin at its 666-panel solar array between Plank Road and Route 7 in Waltham, where the company will trumpet its expanding solar footprint
But the town of New Haven believes the change that the Legislature made was to its detriment. The change uses a complex formula to lower the grand list value of solar arrays by 30 percent. Because arrays will now be taxed based on a lower value, they will likely pay less in taxes to municipalities.
New Haven selectboard chair Kathleen Barrett said the town portion of Cross Pollination’s taxes last year was about $19,000, but estimated next year’s revenue to the town will be $7,000 to $8,000 less.
Barrett was critical of the Legislature for abruptly changing how solar arrays are taxed, adding that the town is hesitant to endorse projects if the tax revenue they will generate is uncertain.
“I have a problem with (legislators) changing the rules as you go along,” Barrett said. “Originally we were going to take in quite a bit more in taxes, then they started changing the rules.”
Selectman Doug Tolles said the tax change is an unnecessary subsidy to solar companies.
“I call it corporate welfare,” Tolles said.
Tolles said he believes New Haven is getting a raw deal, because the town is receiving less revenue in taxes from solar farms, which he believes also lower the value of neighboring properties.
“The Legislature treats different sources of electricity in an unequal manner,” Tolles said. “The town gets the short end of the deal, because of the lowering of people’s property (values).”
Tolles said he does not oppose solar power outright, but does not believe New Haven should host so many arrays.
“New Haven has about 600 houses, but it’s enough power to power 20,000 homes,” Tolles said. “New Haven is doing more than its fair share and getting nothing for it.”
Tolles said he’s concerned that two proposed arrays — one off Route 7 near Town Hill Road and one off Sawyer Road — will not provide an adequate benefit for the town.
The arrays, proposed by solar company GroSolar, would produce 5 megawatts. The White River Junction company has not yet filed paperwork with the Public Service Board, but if approved, both would dwarf existing arrays in New Haven and be among the largest ever constructed in the state.
Tolles said he believes that under the new solar tax structure, GroSolar would not pay much in taxes.
“What you’re going to wind up with is an $18 million solar facility with the same taxes as my house,” Tolles said, whose Hallock Road home is valued by the town at $680,000.
Local residents and town officials said they’re also concerned that New Haven doesn’t have the authority to regulate solar projects within its borders. That authority lies with the Public Service Board, which regulates the state’s utilities.
“We have no control, absolutely none,” selectboard chair Barrett said. “Basically they said, ‘We don’t care what your rules are, what your bylaws are — the state of Vermont has made a commitment, and (New Haven) is close to cheap power, so that’s that.’”
Barrett said New Haven is an ideal candidate for solar projects because high-capacity power lines from the Vermont Electric Company traverse the town, parallel to Route 7.
The Public Service Board does invite interested parties, such as local residents and town and regional boards and commissions, to submit testimony about proposed projects. But Barrett said that often doesn’t do much good.
“Personally, I think lobbying the PSB is not effective,” she said.
In August, the New Haven Planning Commission wrote to the Public Service Board, exasperated about the number of solar projects proposed in the town of only 1,800 residents.
“The number of projects itself is grossly disproportionate to the population of New Haven,” the commission wrote, noting that some of the proposals run afoul of the town plan. “We feel that this number of projects would be a burden on our town.”
Though the site of a proposed 150-kilowatt solar array on Dog Team Road was in an area zoned for agricultural and rural use, the PSB approved it on Sept. 10, declaring that it did not violate town zoning laws.
Barrett said the town has little influence on how the state approves projects in New Haven.
“The Public Service Board has said it doesn’t matter what we say,” Barrett said, noting that the PSB can choose how to weigh the merits of the town plan and zoning bylaws. “They have their own set of factors.”
A COMMERCIAL USE?
A key part of the discussion over the expansion of solar is whether arrays are considered a commercial or agricultural use. Last week, a representative from SunCommon told the Independent he believed arrays to be an agricultural use, likening them to community gardens.
Tolles said he couldn’t disagree more with that position.
“It’s 100 percent commercial,” the selectman said. “It’s an industrial use; it’s not even close to being a farm.”
Tolles said solar arrays are unsightly, and could hurt tourism, one of the state’s backbone industry.
“If you want to see things that are ugly with a capital ‘U,’ drive down Route 7,” Tolles said. “We as Vermonters cherish our tourism, our natural beauty and vistas, and people driving up Route 7 are going to see that.”
Tolles was critical of the selectboard, on which he serves, for not doing enough to regulate solar arrays in New Haven. He said he first decided to run for the board this March because he felt it has been ineffective in the past.
“The selectboard has failed to protect the town,” Tolles said. “We’re just a dumping ground.”
Barrett said the selectboard has not made a determination about whether it considers solar arrays to be agricultural or commercial use.
“We haven’t really gotten into that definition,” Barrett said. “I know the solar people like to call it agriculture, because after the panels go away, it can be converted back to farmland.”