Solar Farm Could Generate $1.4 Million In Property Tax Revenue for Fayette Co.

The 7V Solar Farm that Fayette County Commissioners approved a property tax abatement for last week could generate up to $1.4 million in tax revenue for the county over the 10 year abatement period.

“These figures are based on current estimated project costs, property tax statutes, 2019 tax rates being held constant, etc.,” said Evan Horn, a tax consultant who is working on behalf of Candela Renewables, the solar company building the project.

“All of these numbers including the final size in megawatts of the project are still subject to change,” Horn told the Record this week.

The proposed 240 megawatt solar array would be located in the Muldoon area.

The project could generate up to $2 million in revenue for Flatonia ISD through a separate tax credit program. However, that revenue could be subject to the state’s “recapture” program, whereby wealthy school districts are forced to share revenue with poorer school districts.

Horn estimated that the roughly 3,800 acres of land that the project will encompass currently generates about $5,000 annually for the county and school district.

The abatement deal that 7V struck with the Commissioners last Thursday allows the County to collect a greater share of taxes over time. Taxes would be abated at 75 percent in the first two years. After that it drops to 70 percent and decreases by five percent every other year. In years nine and ten, the abatement would be 55 percent.

The taxable value of the project would decrease over time, however. 7V’s application states that the company would initially invest $191 million in capital. By year ten, the project depreciates to $30.5 million.

The Record spoke with one observer after last Thursday’s meeting who questioned how the project could lose $161 million in value over 10 years. So we asked Richard Moring, chief appraiser at the Fayette County Appraisal District.

“It looked odd to me as well,” Moring told the Record Monday morning. “It is legitimate, though.”

Moring said he ran the question by some appraisal experts with whom his office contracts. They pointed to a part of the Texas Tax Code (Sec. 23.26) that requires the appraisal district to determine depreciation based on a maximum useful life of 10 years, even though the equipment may last 30 to 50 years.

The law provides a great incentive for solar companies by reducing their tax burden. The law was passed in 2013 as Texas House Bill 2500 and had the support of solar industry lobbyists.