Solar company asks county for tax deal for Hancock project

by Kate Shunney

A solar energy firm with plans to build a $2.3 million array of solar panels in the Hancock area is set to ask Washington County officials for a special tax arrangement to make their project financially feasible.

In December 2020, the county’s Board of Zoning Appeals approved a two megawatt Solar Energy Generating System (SEGS) on the Weller Road farm.

SGC Power, LLC was on the agenda for the Washington County Board of County Commissioners meeting on Tuesday, September 14 to propose a PILOT Agreement with the county. Under that agreement, the company would make payments to the county instead of taxes on their business personal property.

SGC Power has drawn up plans to install a two-megawatt solar energy generating system on a 10-acre parcel of the McKee farm on the 14000 block of Weller Road in Hancock.

A site map of the proposed solar generation facility on the McKee farm along Weller Road.

According to the company’s letter to the county, that solar generating system would consist of 6,240 solar modules, mounted into the ground, and 16 inverters that would turn the solar panels direct current power in the AC power for use.

SGC Power says it has leased that part of the McKee farm for 20 years, with renewal options for another 20 years. The company says it expects the construction and installation of the solar farm to be costly.

“The Company expects an initial outlay of $2,305,800 for the equipment and solar modules. As a result of the start-up costs, the business personal property taxes are comparatively more significant for a SEGS project that other businesses for which only a portion of the start-up costs are taxable as business personal property,” the company’s attorney noted in their request to the county.

In other words, as soon as the company installs their solar array, they would have to begin paying business property taxes on the full value of the equipment. Instead, the company is asking the county to accept payments based on the wattage of power they generate each year. They have requested approval to create a PILOT Agreement where the company will pay $6,500 per megawatt of “installed capacity” per year. That would equal payments of $13,000 per year for the life of the 20-year property lease in lieu of business property taxes.

The county has already agreed to similar arrangements for other solar projects, according to documents attached to the commissioners’ agenda.

In their request for the PILOT Agreement, SGC Power says the company has taken into account several concerns about the solar facility. They point out that they have leased just 10 acres of the McKee’s 200-acre farm, leaving significant farmland in place for agricultural use. They say the area around the solar array is forested and provides a visual buffer around it. SGC Power told the county they have bonds in place to cover the costs of future dismantling of the solar array if the equipment becomes outdated or the lease on the land runs out.

“Construction of the Facility will also provide work and jobs for local firms. The Company has a list of local companies that will be sent a request for quote. The Facility will need to contract for excavation, electrical system installation, fencing and landscaping, to name a few,” the company’s attorney wrote in a letter to the county.

SGC Power expects to start construction of the solar facility as early as January 2022, with “anticipated commercial operation” set to start in mid-August of 2022, they said.