Some question solar power's value to Yuma County

Over the past few years, state and federal officials have been championing solar power as a solution to our dependence on foreign oil, a source of clean energy and a way to generate jobs and tax revenues for local economies hit hard by the recession.

The promise of solar power has led to generous government loan guarantees and tax incentives for solar companies to build and expand.

Recently, Arizona's generous tax breaks for solar power have led some area politicians to question whether solar power, including the Agua Caliente Solar Plant north of Dateland, is a good deal for Yuma County taxpayers.

“This supervisor is going to have a problem with (solar power),” said Russell McCloud of the Yuma County Board of Supervisors, “because there is very little benefit for us once you factor everything in.”

McCloud said one of the biggest problems is solar plants enjoy tax rates that are far lower than other businesses.

“The Legislature passed a law to attract solar power to the state. They wanted to attract large solar projects to Arizona with the ultimate goal of having the solar panels manufactured here ... The thinking was that everybody wins because you have jobs creation in cooperation with renewable energy.

“So what happened was that a solar company like the (Agua Caliente) plant in Hyder ... is taxed at a fraction of the cost of a normal business. So the taxes the county and schools will collect is peanuts compared to what it would be if the (Agua Caliente) plant was taxed like any other industry.”

According to projections by the Yuma County Assessor's Office, the Agua Caliente solar plant will have an acquisition cost of around $1 billion, and after all of the tax breaks are applied will have an assessed value of approximately $9.7 million. As a result, Yuma County would receive a first-year tax of $192,000; nearby Hyder Elementary School District taxpayers would see a decrease in their tax rate from $3.24 to $2.72, and Antelope Union School District taxpayers would see a decrease from $2.10 to $1.79.

While this would be a net increase for all three tax districts since the land the Agua Caliente plant took over was formerly agricultural, which generates very little property tax revenue, County Assessor Joe Wehrle said these numbers are not close to what they would be if the solar plant was taxed like a regular business in Yuma County.

If Agua Caliente were subjected to the same tax rate, Wehrle said, Yuma County would receive a first-year tax of $3.7 million. Antelope Union's tax rate would decrease to 47 cents and Hyder Elementary District's tax rate would drop to 12 cents.

“If we could get these numbers, everybody's property taxes in the county would plummet,” McCloud said. “The board (of supervisors) wouldn't start spending hog wild because we've always been conservative. So if they had to pay like other businesses, property taxes would drop substantially.”

But taxes are not the only problem McCloud foresees.

“Solar power does not create the types of long-term jobs that agriculture does,” he said, adding that while the Agua Caliente plant currently employs hundreds of workers, once construction is completed, it will employ only five people at any given time for 30 years.

“And we've taken thousands of acres of agricultural land out of production, which cost not only agriculture jobs but the peripherals like chemical sales, seed sales, harvesters and transportation. There is so much which comes from agriculture and supplying agriculture.”

As evidence, McCloud pointed to an economic impact analysis commissioned by the Greater Yuma Economic Development Corp. It compared agricultural usage to solar usage on land that would be considered optimum for both industries.

According to the analysis, agricultural use of land employs 10 times as many workers and supports 10 times as many households as solar production. Also, total personal income is four times higher and annual production is estimated to be $43.3 million higher when land is used for agricultural and related industries.

“So when you look at all these things, and then you factor in that we don't even get the power, I just don't see where the benefit is for us,” McCloud said.

Pacific Gas & Electric Co. in California has a contract for the power generated from the Agua Caliente Solar Plant.

Darren DaRonco can be reached at 539-6857 or ddaronco@yumasun.com. You can follow him on Twitter @YSDarrend or on Facebook at www.faceboook.com/YSDarrenD.