Discussions about the Strata Solar project have resumed and on September 10, the public will get to weigh in on two public hearings. One pertains to the special exception, the conditions, and the site plan for the project, and the other is regarding the project’s sighting agreement.
Richmond County was in the midst of considering the Strata Solar project when the pandemic hit. Due to the size of the crowds that those meetings attracted, the discussions were put on hold from April through June.
This month, the planning commission moved forward and voted 5-to-3 recommending the project to the Richmond County Board of Supervisors. One member of the planning commission abstained and one was not present.
Afterward, the board of supervisors held a closed-session meeting with its legal council to discuss negotiating issues, and they emerged with plans to bring the public into that conversation.
Special exception and plans
The hearing on the special exception is required because solar projects are a permittable use in an A-1 section of Richmond County. But to actually get permitted, there needs to be special consideration and approval given to a proposed project.
With the special exception comes consideration of the site plan and topics, such as the projects buffers and setbacks, screenings, hours of operations, traffic plans, bonding requirements, decommissioning at the end of life, and items of that nature, explained county administrator Morgan Quicke.
The second public hearing will involve a proposed sighting agreement, which is something Richmond County’s legal council has been working on. The option for a sighting plan was made available from legislation that came out of the 2020 General Assembly.
It allows localities with qualified or qualifying opportunity zones to negotiate an upfront payment to take care of expenses, such as capital improvements or broadband projects. The agreement outlines details for decommissioning the project and the interactions between the company and the county, such and when and how the county may access the site for inspections. It also outlines how fees associated with the project will be handled, an issue that Richmond County will inevitably face if this project proceeds as it will be necessary to use contractors, including engineers, given the county’s small staff.
Richmond County opts for revenue sharing
Last month, Richmond County held a public hearing on the option to adopt a revenue-sharing compensation model for solar projects. And this month the board voted in favor of adopting it.
This is also a product of the 2020 General Assembly session, and it gives localities an alternative to drawing revenue from the machinery and tools tax when dealing with large solar facilities.
The current machinery and tools tax uses a large depreciating schedule set by the SCC, and after the depreciation schedule you can only charge 20 percent of the value of the solar facility, Quicke explained. With a less valuable asset to tax, the revenues to the county decline over the life of the project. In the case of the proposed Strata Solar project, the machinery and tools tax, would bring in around $3 million to $3.5 million over a 30-year period.
With the revenue-sharing model, the county can charge $1,400 per megawatt per year on any solar facility over 5 megawatts. Strata Solar’s project is proposed to be 127 megawatts, which would bring in $177,800 annually, or over $5.3 million over the facility’s lifespan.
If the Strata Solar project is approved by the board of supervisors, by adopting the revenue share in lieu of the machinery and tools tax, that’s about a $2 million difference in taxes over the life of this project, which is why this is best option for Richmond County at this time, said Quicke.
Ahead of board’s vote, he noted that one of the drawbacks to revenue sharing is that there’s no escalator built in that allows the county to increase that $1,400 fee, so inflation will eat into impact of that rate over the years. But Quicke believes there is likely to be big push in the 2021 General Assembly to address escalation.
The point of implementing the revenue-sharing option in the first place is that Virginia has put a huge emphasis on shifting to clean energy over the next 20 years. The solar companies realize that there’s opportunity for them but those opportunities are mostly limited to the rural counties since urban areas don’t have the necessary space. So, these companies realize they need to sweeten the pot a little bit for small counties to more accepting of these projects, and therefore, the solar industry has been supportive of the revenue-sharing legislation, said Quicke.
But Strata Solar didn’t for or against Richmond County adopting the revenue-sharing ordinance. Nor is the adoption of this revenue model a surefire sign that Richmond County is rolling out the welcome mat for the solar industry.
Richmond County is not going out baiting solar companies, said Quicke. But solar is going to be something that’s going to continue to pop up in rural counties. And we want to be prepared for it, he said.