Tax Abatements for Solar Farms Ignite Controversy in Central Texas

Reprinted from the Far West Texas News

A group of Bell County residents and landowners are organizing against any more tax abatements associated with proposed solar farms.

“Land is getting eaten up by the thousands of acres per day with urbanization and now we’re getting eaten up with solar panels,” said Robert Fleming,  founder of No Solar Farms Central Texas. “These solar companies, along with investors, have found this loophole with tax abatement agreements. They promise big bucks to the commissioner’s courts and to the school districts but with the improvements, which are the panels on top of the ground, are depreciated out rapidly. Until in five years they’re worth less than half of what they were initially.”

The Greasewood in Pecos County was originally a solar project of Onpeak Power until it was sold to Denmark-based Copenhagen Infrastructure Partners (CIP).

According to Texas Comptroller Office documents, the project is receiving tax breaks from Pecos County worth $908,000 per year for 10 years beginning in 2020. The $908,000 break reduces what would be a $1.16 million annual tax levy to only a $255,000 annual tax. The document also shows that the project is receiving a tax abatement from Buena Vista Independent School District, which will reduce the annual taxable value of the project from a high of more than $260 million to only $30 million. That abatement would also last 10 years beginning in 2020. 

“One reason these foreign investors and out-of-state companies are coming to Texas is because they don’t have to spend a $1,000 per acre to clear the land,” Fleming told Far West Texas News. “There’s low brush or no brush and in central Texas; it’s all farmland. The black land prairie, which runs from North Texas to Corpus Christi, is all farmland. They don’t have to push any brush or take any fences out, so to speak. It’s all ready for them to start punching holes in the ground to put up solar panels.”

Further incentivizing companies and foreign investors are the tax abatements.

“If investors can come in and get attached to an abatement of 50% to more than a 100%, the first year they will pay taxes but the second, third and fourth year, they’ll pay fewer taxes because it’s on a rapid depreciation schedule,” said Fleming in an interview. “Otherwise, the solar farm will pay taxes on the full market value of $75 to $100 an acre. Plus, they will pay a penalty for removing it from agriculture and they have to pay tax on the $30 to $50 million for top of the ground improvements. So it’s a huge tax burden without the abatement agreements.”

From 2010 to  2019, about $71.2 billion in federal subsidies went to renewable energy, according to a Texas Public Policy Foundation report. About $18 billion in subsidies through 2029 include $14 billion from the Competitive Renewable Energy Zone transmission lines, $2.5 billion in 313 property tax abatements, $1 billion in grid interconnection costs and $570 million from the Renewable Energy Credit program.

“It does bring money into our county and schools short term but not long term and people haven’t figured out rapid depreciation and how this abatement works,” said Fleming who farms several thousand acres for cattle, soy and corn. “They don’t understand how the deal works. That’s why we’re trying to work with our superintendent at Troy Independent School District and the school board to show them that these deals have a short fuse.” 

Finally, Fleming says investors are creating conflict among residents and landowners by sending cash offers to landowners they find at the tax appraiser’s office.

“They are wiggling into our communities, dividing and causing problems because people don’t want to live next to a solar industrial site,” he said.