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JUDGE: Making sense of solar tax abatements

In the last couple of years, several solar companies have petitioned the Milam County Commissioners Court for tax abatements. Of course, the court is typically the second stop for solar, as it must first acquire a lease with individual landowners.  

The decision to lease land for solar is not that of county government, but solely that of the property owner. County government is not involved in any way in the leasing process, nor should it be. The decision to lease or not lease is solely that of the landowner.  

However, once a lease (or option) agreement is made with the landowner, the solar companies next seek tax abatements from county government and the school districts.  Once solar is installed the major cost is taxes, as there is very little maintenance. Tax abatements for counties are governed by Chapter 312 of the Texas Tax Code.  Chapter 312 basically provides that abatements should be considered by the Court when: (1) the abatement will expand employment or (2) attract major investment in the County that will contribute to the economic development of the County. The estimated overall solar investment in Milam County is in excess of $2 billion!

Solar brings hundreds of temporary construction jobs. For example, the Two Rivers solar project will employ about 200 construction workers with an estimated payroll of $10 million. The total payroll estimate for construction for all the projects is in excess of $75 million! A lot of this money will go back in the County and there will be an increase in sales taxes.

Solar brings tremendous school tax revenue for our school districts.  It is estimated that the solar projects will provide $135 million to our local school districts over the life of the contracts.  Solar will pay an estimated $70 million in county taxes over the life of the contracts.  This new $200 million in tax revenue will help relieve tax pressure on the individual landowners.

Solar takes little out of the county. County government does not provide infrastructure for solar.  Solar does not use water, mineral rights or sewage.  In fact, the only thing that solar uses is sunlight, which is available to all of us.  Solar has leased about 18,000 acres of land in the County from various individual landowners, which accounts for a small percentage (.03 percent) of the available 497,481 acres of farmland in the county.

Solar is entitled to a one time 26 percent federal income tax credit.  This is offered nationwide to virtually any solar producer.  As the largest cost of solar after installation are taxes, local abatements are necessary to keep local solar.  Solar can locate in many, many places throughout the state.

Texas is the second largest producer of solar power in the country.  Therefore, solar is safe and a reliable alternative energy source.  In Texas, the property owner makes the decision to lease and county government makes the decision on abatements. County government abatement decisions are based on Texas law, which requires the possibility of expanded employment or a major investment.  Here, solar brings both! 



The Cameron Herald

The Cameron Herald
P.O. Box 1230
Cameron, Texas 76520

Phone: 254-697-6671
Fax: 254-697-4902