Thursday, February 23, 2012

Industrial Solar Costs Counties Millions of Dollars

Yet another reality check is in from California on the true cost of industrial solar development.   Inyo County reported to the California Energy Commission that the construction and operation of the BrightSource/Hidden Hills Solar project (HHSEGS) would incur induced costs of $11.1 million during construction, and then $1.7 million during each year of operation (download the report here).

According to Inyo County Administrative Officer, Kevin Carunchio, these are  preliminary estimates of the fiscal impacts of the construction and operation of HHSEGS.  The County had to rely solely on the information contained in the Application which lacked critical information on key elements of the project including the security and emergency response plans, and heavy truck traffic routes.   Like Saguache County, the HHSEGS project is in a sparsely populated area only very lightly served by social service offices located at significant distances from the site, therefore the cost of providing services is not incremental.

Table 1 below summarizes the estimated increased costs for health and human services, law enforcement, information services, invasive weed and waste management, transportation, and water monitoring.  While the Hidden Hills project is a higher rated MW capacity, it is similar in size to the proposed 3,000-acre Solar Reserve industrial development currently under review in Saguache County.  

Departmental staff estimated that the influx of more than a thousand construction workers would increased numbers of accidents, emergencies, high theft, vandalism and violent crimes substantially.  Significant increases in invasive plants are also expected.  Concerns arose over the disposal of non-hazardous solid waste and costs associated with required planning document revisions and staff, temporary RV housing, waste collection and water monitoring.

Schematic map of 3,277 acre HHSEGS power tower project in CA
"Much work still needs to be done" to understand the longer run opportunity costs of the 3,277 acre project, said Carunchio, but, "it is clear that the cost of these lost opportunities (tourism, residential development, etc.), "may be significant".

Carunchio concluded that the "costs to the County greatly exceed the increased property taxes that the County will receive due to the construction of the project (approximately $300,000 per year) and the taxes are insufficient to support needed local improvement and services required to serve the project". 

We anticipated significant induced costs when we looked at the 145 MW Tessera Solar project proposed last year (see Big Solar's Promise).  The lag in revenue collections required under the Solar Facility Taxation Bill (SB 09-177) means the County sees no revenue until a year after a power plant reaches its full generation capacity.  Even then, taxation starts at 25% the first year and slowly ratchets up.  In contrast, the increased demand on services is highest during the project construction phase, when no revenue is available to offset possibly skyrocketing costs. 

Wishful thinking and industry promises are no substitute for taking a hard look at the actual costs and benefits of industrial solar.  If approved, there is a real possibility that Solar Reserve could cost Saguache County more than it can expect in return or else force citizens and communities to absorb impacts that it cannot afford to mitigate.

And we can't help but ask: If the County is going to invest millions of taxpayer dollars in solar infrastructure, why not invest directly in its own people and communities?  The County could generate more than 3 times the number of local jobs, individual and business income and revenue for County coffers and schools by investing an equivalent (or smaller) amount in energy efficiency and local, distributed renewable energy.