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Commonwealth's Counties

Utility-Scale Solar Seminar

It didn’t take long for a spontaneous conversation to erupt among the nearly 70 attendees of the VACo Utility-Scale Solar Seminar on June 27. After all, the topic was solar and there were plenty of questions and an abundance of knowledge in the room.

VACo’s Joe Lerch kicked off the meeting in Dinwiddie County with an overview of the growth of utility-scale solar in the Commonwealth. He also spoke about the impact of applicable local government taxes on the industry. In particular, action by the General Assembly in 2016 to mandate a 80% reduction on the local property tax applied to solar equipment has resulted in localities receiving significantly less revenue over the life of a project.

Lerch also compared applying the actual Machinery and Tools tax to the real estate tax and the difference it makes to the tax revenue of specific counties. Currently, for projects greater than 25 Megawatts in size, state law mandates that the solar equipment be taxed at a rate no greater than the local real estate tax. By comparison, wind turbines are taxed at the M&T rate. For example – Appomattox County would receive $9.6 million on a $100 million facility compared to $1.8 million if it applied the M&T tax for 25 years.

At this point of the meeting – many attendees wanted to know more about taxation. Lerch handled the program over to Mecklenburg County Administrator Wayne Carter and Halifax County Chair Dennis Witt, who shared their experiences and answered questions.

Carter spoke about the aggressive depreciation schedule that the State Corporation Commission (SCC) applies to solar facilities, where by year 24 the value applicable to local taxation is 10% of original cost. Combining this with the state-mandated exemption for M&T results in only 2% of the original value of the facility eligible for local taxation.

Witt talked about an effort by some counties during the 2019 session to end the M&T tax exemption by January 1, 2020 (it is currently set to expire in 2024). While the legislation failed to pass, it has resulted in ongoing discussions with representatives from the solar industry that may lead to potential legislation in 2020 to address the shortfalls in revenue created by the exemption.

The spontaneous conversation about counties and solar lasted the entire morning session. After lunch, Richard Street took the podium and spoke about stormwater and large-scale grading projects. The Spotsylvania County Deputy Director of Environmental Codes shared his experiences clearing 400-plus acres at a time.

Then the panel of Berkley Group CEO Darren Coffey, Southampton County Community Development Director Beth Lewis, and Culpeper County Planning and Zoning Director Sam McLearen discussed solar’s impact on community planning.

The trio detailed the process, the effects, and the outcomes of solar projects in their communities. McLearen also provided Culpeper County’s utility-scale solar facility development policy.

By the end, it was obvious that the meeting had answered many questions and enlightened those in attendance on the current state of solar in the Virginia. VACo thanks everyone who came to make the first workshop a success.

VACo Contact: Joe Lerch, AICP


Joe Lerch | Director of Local Government Policy | Virginia Association of Counties | PRESENTATION | Depreciation Schedule

Taxation and Solar Development
Wayne Carter | County Administrator | Mecklenburg County

Dennis Witt | Board of Supervisors Chair | Halifax County

Stormwater and Solar Power
Richard A. Street | Deputy Director of Environmental Codes | Spotsylvania County | PRESENTATION

Solar’s Impact on Community Planning
Darren Coffey | CEO | The Berkley Group

Beth Lewis | Director | Southampton County Community Development | PRESENTATION

Sam McLearen | Director | Culpeper County Planning and Zoning | PRESENTATION | Culpeper County Solar Policy

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