County targets solar incentive’s ‘fiscal inequities’
A primary incentive for developing renewable energy in California has cost Kern government $103 million in tax revenues in 10 years, according to a new county report that stops just short of suggesting the Board of Supervisors stop approving solar arrays if the state keeps attacking the far more fiscally supportive local oil industry.
A board-ordered study that went before the supervisors Tuesday concluded a state-approved property tax exclusion that was supposed to end in 2014 but will continue through at least 2024 keeps large-scale solar power investments off county property-tax rolls, lately costing Kern government a little less than $20 million per year.
The report represents an escalation of tensions between the county and the administration of Gov. Gavin Newsom, who upset local officials by tightening restrictions and increasing regulatory scrutiny of the state’s oil industry.
It’s no coincidence county supervisors unanimously ordered the solar-revenues study shortly after Newsom called in September for banning the oilfield technique known as fracking and banning sales of most new vehicles that aren’t emissions-free starting in 2035.
As it stands, the solar industry contributes about $1.5 million per year to fund county government, according to the report. That’s less than 1 percent of the $200 million the local oil and gas industry paid the county in property tax payments in 2019.
The report’s author, county top planner Lorelei Oviatt, noted solar projects pending in the county amount to a whopping 4,600 megawatts of solar-power generation and 6,500 megawatt-hours of battery storage.
At a time other regions turn away such developments, she wrote, California’s renewable-energy goals “cannot be achieved without Kern County projects.”
The state’s promotion of solar energy development “in juxtaposition to Sacramento’s incessant attacks on our oil and gas industry support a review of policies regarding these discretionary zoning (solar) projects within our jurisdiction,” the report says.
The Sacramento-based executive director of the Large-scale Solar Association, Shannon Eddy, begged to differ Friday, saying if not for the property-tax incentive, the solar projects would not have been built at all and the county wouldn’t have gotten $53 million in related sales-tax revenues.
“We’ll definitely be talking with the county and working with them on how to address all of these issues,” Eddy said. “And not just Kern County: all of the counties.”
She added that the industry group had not yet decided whether to support another extension of the state sales-tax incentive, which the county is actively lobbying against.
The county report acknowledges Kern’s inventory of 36 solar installations spanning 36,000 acres provide construction jobs, a one-time sales tax and a “nominal sum” of as much as $1 million per year for law enforcement and other services.
But because most of the installations’ “green electrons” flow north or south instead of staying in Kern, the report says the county essentially bears the brunt of California’s solar energy aspirations without fair compensation.
“The current solar exclusion benefits the buyers of green power and the policies of California state government to the detriment of communities that site commercial solar projects, like Kern County.”
The state incentive, called the Active Solar Energy
System Exclusion, works by stopping county tax assessors from including solar panels in their annual calculations of how much a property is worth from a property-value taxation perspective.
Excluding the panels’ value means the county has been unable to tax much of the more than $50 billion invested in Kern since 2009.
Oviatt, director of the Kern County Planning and Natural Resources Department, noted the county is not trying to do away with the property-tax exclusion as it relates to small-scale, rooftop projects.
Her recommendation was that the board receive and file the report “and direct staff to continue working on solutions and remedies to the fiscal inequities posed by large-scale commercial solar projects.”