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Tuesday, June 28, 2011

Solar Plants Living On The Edge

Quick! What's the extraction and production tax in North Dakota levied on oil industry?
I think it's 6 to 6.5% for each, totaling 12.5 to 13% tax on oil industry for each bbl of oil taken out of the ground in North Dakota. There are other taxes associated with the production of oil. Extraction and production is just the start. There are property taxes, road taxes on the trucks that haul away the oil, income taxes on profits, etc.
Now, headline story in Los Angeles Times business section today: "Fee Is Considered For Solar Plants."

Quick! How much does the home to some of the largest solar energy plants in the state want to "tax" the solar industry?
Two (2) percent of annual revenue. 
Response from the solar energy companies: it will break us. We can't afford to be taxed at 2%.

Here's the crux of the story:
Riverside County, home to some of the largest solar energy plants in the state, is considering imposing a development fee on such installations, a move that critics say could chill prospects for the renewable energy business in the region.

The new levy, which would require solar developers to pay 2% of their annual revenue, is needed to help offset the potential toll that the massive plants could take on surrounding communities, county officials said.

More large-scale solar plants are being installed in Riverside County than anywhere else in California, according to the county. More than 185 square miles in the county is set to be blanketed in mirrors.

Those projects could strain local roads, bridges, law enforcement and medical services, the county said.

Here's the response from the solar energy:
But solar developers said the fee, which they said came out of the blue, could make their installations unaffordable and less attractive to investors. Some are threatening to relocate their projects if the proposal, which they have dubbed the "sun tax," is approved.
If these companies are living that close to the edge with regard to economics/finances, heaven help them. 

By the way, look at the footprint these projects take up:
"It's a game of gotcha," said Jim Woodruff, vice president for government affairs for First Solar, which is in the process of obtaining permits for Desert Sunlight, a 4,000-acre project that would provide enough electricity for 160,000 homes. "For the county to come in at the eleventh hour, when we're so close to the finish line, is a troubling way to do business."
4,000 acres is 6.25 sections (a section is 640 acres). Absolutely nothing else can be done in a solar panel project -- the panels take up every square foot of the 4,000 acres, unlike wind turbines, oil wells, or natural gas wells, where farming can still go on around the towers or the pumpers.  Here in Los Angeles, we have pumpers in residential neighborhoods.

I wonder how many desert tortoises are affected?

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