UPDATE: Senator says tax bill 'defies logic'



CHARLESTON TOWNSHIP — Producing 225,592 kilowatt hours of electricity in its first year of operation, a solar farm in eastern Kalamazoo Coun­ty that went online in early 2010 has exceeded expectations.

Also exceeding expecta­tions is the property tax, said Sam Field, a Kalamazoo attor­ney and one of the owners of Kalamazoo Solar.

The $27,689 tax bill for the Charleston Township prop­erty means that the owners are losing money, even when being paid a premium price of 45 cents a kilowatt hour by Consumers Energy, he said.

“That Michigan property tax burden works out to a cost of 12.3 cents per kilowatt hour,” Field said. “That amount is more than the retail value of the electricity.”

For comparison, Field re­searched the property tax for the Palisades Nuclear Plant in Covert Township along Lake Michigan. He found that the annual real and personal property taxes for Palisades are just over $12 million or .2 cents per kilowatt hour.

“The property tax burden on our solar project is 60 times as much as the property tax burden on the nuclear power plant when calculated on a per kilowatt hour basis,” he said.

Kalamazoo Solar has filed an appeal with the Michigan Tax Tribunal over the property tax issue, but in the meantime, it has to continue paying the property tax, Field said. The appeals were filed a year ago but it could be another two years before the hearing takes place.

The property tax issue has been the one surprise in the whole solar farm venture, according to Field, “It never crossed my mind that the property taxes would become a significant obstacle to our success. I thought it was all kinds of other things. We didn’t know whether our design was going to work or whether the location was a good location or so many things,” Field said.

Field said he considers Michigan’s system to be “schizophrenic” in the sense that it places a tax burden on renewable energy while at the same time the state has a renewable portfolio standard law to encourage renewable energy. He contends that all sources of producing energy should have the same per kilowatt hour tax rate.

“On a level playing field, I’m convinced more than ever that solar is going to prevail and carry the day,” he said.

State Sen. Tonya Schuitmaker, R-Lawton, has visited the Charleston Township solar farm and is working to fix the problem of the property taxes, Field said.

“She has introduced (bills) to abate property taxes on small renewable energy projects of two megawatts and less. We greatly appreciate and applaud her efforts,” he said.

With reasonable or no property taxes, Kalamazoo Solar could make a small profit, Field said.

“What we’ve learned is that if we solve some of these economic issues, that solar energy is just amazingly feasible in Michigan,” he said.

The company has a 12-year contract with Consumers Energy and plans to fulfill that contract, despite the property tax issue, he said.

Taxes aside, the first year of operation for the solar farm has been virtually trouble free, Field said.

“Everything has worked amazingly well,” he said. “We have been overwhelmingly amazed by how simple it’s been, how well everything has worked. You have minor maintenance issues from time to time, but nothing of any consequence.”