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Kern supervisors fire shot at state tax incentive that discounts taxes for renewable energy properties
In the latest tiff between the Kern County Board of Supervisors and Sacramento legislators, a renewable energy tax incentive has come under fire for squeezing the county out of tens of millions of dollars each year.
Last week, supervisors voted unanimously to urge the governor to allow the tax incentive to sunset as scheduled in 2024. The incentive, known as the solar tax exclusion, keeps the assessed value of large scale solar properties equal to what it was before the project occurred. Typically, the assessed value of a property increases when an improvement like a solar project has been added.
Because of this discount, Kern County claims it misses out on around $19.9 million per year, or $103 million over the last 10 years.
The money would go to fund things like the Kern County Sheriff’s Office, Fire Department and library services, all of which are financially struggling. To add insult to injury, from the county’s perspective, the solar projects power communities in Pasadena and San Francisco, among others, benefiting those residents at the expense of local constituents.
In an op-ed published on Sunday, Board Chairman Phillip Peters said state energy policy widens the gap between affluent and disadvantaged communities, and oppresses some of the poorest parts of the state.
“As the Governor looks toward expanding renewable energy Statewide, he needs Kern County’s cooperation,” Peters said in a text to The Californian. “Unfortunately, the State continues to attack the oil and gas industry on all fronts, even though it provides a significant amount of jobs and revenue for vital public services. Then, it prevents us from realizing any significant revenue for increasing the number of solar projects.”
The county says California’s green energy goals would not be possible without Kern County’s vast network of solar and wind power. In the letter to the governor, supervisors alleged they may have no choice but to raise costs locally on future solar power projects, which could force them out of Kern altogether.
“We’re either going to get this exclusion rescinded or we’re going to come up with a local solution here,” Supervisor Zack Scrivner said during the board meeting last week. “We have been subsidizing the green energy electrons that have been going to Los Angeles and the Bay Area for long enough and I, for one here on the Board of Supervisors, have had it.”
Renewable energy industry experts have pushed back against a cancellation of the solar tax exclusion. Without the incentive, the solar projects may not have been built at all, one advocate told The Californian in December.
Rick Umoff, a senior director at the Solar Energy Industries Association, told supervisors solar projects had generated $44.9 million in local taxes over the last decade.
“This change would change a longstanding tax policy that would significantly impact not only the solar industry, but rate payers, California’s economy, and the ability for California to meet its climate target,” he said of rescinding the solar tax exclusion at the board meeting last week. “This issue does impact all solar projects and is a complicated issue for the industry.”
There are currently around 36,000 acres of land dedicated to renewable energy in Kern County, with another 26,000 acres worth of projects under review. In an attempt to make up for lost revenue, the county plans to levy a $620 per acre one-time charge on all new projects, which is estimated to generate $7 million to $9 million over the next three years.
While the county may welcome more renewable energy projects, local leaders are beginning to question the previously unconsidered costs.
“We only have a certain amount of private land in the unincorporated area,” Kern County Planning and Natural Resources Director Lorelei Oviatt wrote in an email to The Californian. “If we commit all this land to a use that doesn’t produce a fair share of revenue, the physical impacts on communities are a direct result of lack of resources in the General Fund. A community may have houses, but without law enforcement, fire, libraries, code enforcement and services for children and the elderly, people won’t buy the houses. Then they are unoccupied and decline from neglect.”
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