Op-Ed: Sol Systems Tax Proposal is a Bad Deal for Kent County by Janet Christensen-Lewis

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The Kent County Commissioners have been presented with a request to waive substantial Personal Property tax assessments in a Payment in Lieu of Tax (PILOT) from Sol Systems, Inc. for the 7.2 MW Blue Star Solar Project in Massey. The assessed value would make Kent County entitled to $875,000 in revenue (starting in year one at $73,277 declining to $18,319 by year 9 and remaining constant), over the estimated 35-year life of the project. Sol-Systems is instead asking that amount be reduced to $50,000 ($1000 in year 1 with a 2% escalator ending in $1,961 in year 35). This should be rejected, as Kent County can ill afford this tax give away for the benefit of a for-profit corporation that will provide little local employment.

OneEnergy, the initial developer of the project, and Sol Systems, which entered into an agreement to purchase Blue Star Solar in April of 2017, have likely spent in excess of $150,000 on attorney’s fees alone, coupled with unknown other wasted money and time. This has occurred during 4-years of trying, but failing repeatedly, to get the Maryland Public Service Commission (PSC) to accept their legal challenges at every step of their application process. This started with the initial attempt for a waiver to the Forest Conservation Act (FCA), through the final request of withdrawal of the Certificate of Public Convenience and Necessity (CPCN) issued in 2016 by the PSC. The last gasp in these efforts at the PSC was a request to operate outside the rules that govern the Community Solar pilot project, as a 6MW Community Solar project. This final step involved a pleading by their attorney that was rejected by three separate state entities: the Power Plant Research Program(PPRP), PSC Staff and the Commission itself. Not dissuaded by the rejection Blue Star Solar requested and was granted a rehearing after retaining new legal representation. This rehearing confirmed the original decision. Had the administrative and legal costs of these repeated attempts to avoid requirements for solar projects not been frittered away they would have gone a long way towards paying the tax bill.

Sol Systems is a highly successful solar finance and development firm, backed by a 25+ billion-dollar company, Sempra Energy. They manage over 650 million dollars in solar assets for utilities, banks and Fortune 500 companies (companies in the best position to take full advantage of the 30% federal Investment Tax subsidies for solar). They have been honored 5 years in a row by INC (an industry promotion organization) as one of the top revenue generators, boasting 229.4% revenue growth over the past three years. Sol Systems is therefore not an impoverished non-profit, but a highly successful for-profit company.

Sol Systems has stated that the agreement that they have entered with Washington College will not allow them to absorb a higher tax rate than what they have proposed. However, this did not seem to influence their behavior in spending extensive time and money trying to get the project they wanted rather than the project allowed as defined by Maryland regulations and the PSC. They are now requesting that Kent County absorb this loss in revenue for prior poor business decisions by the corporation. Who better to absorb the losses, Sol Systems or Kent County?

Together Sol Systems, and the recipient of the agreement, Washington College, surely benefit greatly with the $825,000 savings. But, how exactly do the residents of Kent County benefit? What is the precedent that will be set in future negotiations with other solar companies? This project sits on land in the Industrial/Employment district of the County. Both areas of this district were set aside for workforce development and employment but Sol Systems will provide minimal employment and no development. These lost opportunity costs for the occupied land are not factored into this proposal. At least the recently publicized subsidy give away to the new Amazon HQ2 by Virginia and New York were predicated on employment and growth; this Blue Star Solar boondoggle has neither of these attributes.

The current proposal as submitted needs to be rejected. The Kent County Commissioners, for the citizens they represent, need a proposal that requires reasonable eligible tax assessments to be made in order for Kent County to also be a beneficiary of the Blue Star Solar project in addition to Sol Systems and Washington College.

Janet Christensen-Lewis is a farmer and board chair of Kent Conservation and Preservation Alliance.

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