A company is hoping to build a nearly 2,000-acre solar farm on the west side of Utah Lake, and is hoping for millions in tax breaks to make it happen.
Doug Larsen, representing Strata Solar out of North Carolina, told the Utah County Commission Tuesday during a work session that the company is looking for a 100 percent tax incentive for the first six years of the project, coming out to about $18 million in foregone tax revenue for all the taxing agencies combined.
No decisions can be made during work sessions.
The proposed 300-megawatt AC solar farm would cover nearly 2,000 acres on the west side of Utah Lake, Larsen said. The plan has already received conditional use approval, Larsen said, and the next step is discussion of property tax incentives. The power generated from the farm would be transmitted through Rocky Mountain Power’s transition lines, essentially purchased by Rocky Mountain Power.
“The way we make that happen is to be as competitive as we possibly can in terms of pricing,” Larsen told the commission. “That’s where property tax incentives come into play.”
Larsen said that as a former economic development director for Weber County, he understands that to ask for a tax incentive, the projects value to the public must be proven. Many projects asking for tax incentives emphasize the job creation a project would bring, Larsen said. However, this project will not create any long-term jobs.
Other than short-term construction jobs created during the six to 10-month building of the project, Larsen said the farm would be monitored remotely using technology.
“This isn’t a jobs-based project,” Larsen said. “This is a project about having the community support a clean, renewable energy project.”
The project would not use any water, impact sewer, or have any transportation trips of any measure throughout the year, Larsen said.
Utah County does not currently have any solar farms. Most solar farms are concentrated in southern Utah, where more sunlight can be gathered. But Larsen said when that energy is transported to be used in the northern part of the state, a certain amount is lost. Having a solar farm in Utah County’s “back yard” would reduce that load loss, making up for gathering less sunlight than a solar farm further south might, Larsen said.
Solar farm projects are typically active for about 30-40 years, Larsen said. Their request of the taxing entities is that 100 percent of the new tax revenue created by the project for six years go back toward the project instead of to the taxing entities.
Larsen said that for personal property growth, which is how the solar farm would be assessed for tax purposes, the only way the taxing entities would be able fully capitalize on new growth through taxes would be to participate in a tax incentive program.
In the seventh year, after the six years of proposed tax incentive were up, Utah County would gather an estimated $188,000 from the project parcels, compared with the current $120 per year it gathers now, according to Larsen.
For all the taxing entities combined, including Central Utah Water Conservancy District and Alpine School District, the estimated tax revenue to be collected that seventh year would go from $1,600 to over $2.5 million, Larsen said.
That seventh year would be the only year the increase would be assessed as new growth. In Utah, property tax rates are adjusted each year so that taxing entities are bringing in the same amount of revenue, with the exception of new growth. That means even property values overall increase, the county’s tax rate would be lowered to bring in the same amount of revenue.
Larsen said after the seventh year, the project would help stabilize the county’s tax base and possibly even lower the tax rate.
Utah County Commission Chair Bill Lee questioned why the county would grant a 100 percent tax incentive when the county has multiple solar farm companies knocking at their door for similar projects.
Lee said the 100 percent tax incentive for six years was “hard to swallow,” but that the county could continue to look at the issue and analyze it.
Likewise, Utah County Commissioner Nathan Ivie called a 100 percent incentive “a big red flag.”
Larsen said if the company were to ask for a lower participation percentage, the “new growth” portion of taxes would not flow back to the county in the same way.
Lee said he would continue to look into that, and directed Larsen to continue working with county staff while the commissioners continue to study the issue.
Larsen said he is trying to schedule a meeting with Alpine School District, which is the recipient of the majority of tax revenue from the project area.