Part 2 – Gross incentives and mandates that crush VT

by Alison Despathy

As discussed in Part 1, not only does the 2024 updated Renewable Energy Standard (RES), passed over the Governor’s veto, drive ecological devastation by renewable energy developers at the expense of Vermonters, there are more state incentives for this destruction than you can imagine

This updated RES forces VT utilities to buy renewable energy, including a certain percentage of instate renewables. 

Environmental degradation of farms, forests and ecosystems is escalating.because proper solar siting was not prioritized and identified during the passing of the RES.  

Getting solar directly to the people to reduce consumption and costs is the real solution but instead of helping Vermonters, the current RES serves its masters  – the renewable energy developers. 

Now hold onto your hats with this one! 

Solar projects do NOT pay education property tax. They are exempt. Can you imagine? With the struggle to cover education spending and the ongoing and substantial increases on VT taxpayers, it is actually painful to imagine that solar developers making millions are exempt from education tax. 

Ask any VT town Lister how painful it is to click on the education tax exempt button for large scale solar projects in their towns. 

Instead, renewable energy developers pay a Uniform Capacity Tax (UCT) which goes to the education fund. This UCT is a pittance AND is locked in, meaning unlike your taxes which go up every year, the UCT is fixed for the life of the project. 

Yes- feel free to scream or maybe cry. 

Here is an example of the UCT nightmare. If you have a nameplate capacity solar project of 500kW, this is approximately worth $1.5 million dollars, the UCT mandates that facilities 50kW and larger pay $4/kW, meaning this facility would pay a fixed rate of $2000 a year. 

This is nothing compared to what another commercial property of this value would pay in education taxes. The scam has to end. 

We have a bill in House Ways and Means that would have at least increased the UCT thus helping the education fund. 

Ultimately the UCT would be repealed and solar developers would pay their fair share like all other commercial developers and properties. Unfortunately, Chair Kornheiser has ignored this bill. 

Based on information from documents received in a public records request, there are questions emerging;

Are all solar developers paying the Uniform Capacity Tax? At this time there appears to be discrepancy in numbers and questions have arisen regarding gaps in pay and how this impacts lost revenue for VT while shifting costs to other property owners. 

It is important to note that in addition to education tax exemptions, solar developers also get property tax breaks.

This session, there was a bill in the Senate Agriculture Committee to address this solar siting issue on prime agricultural land and forests. 

Agricultural land has continued to decline in VT and industrial solar projects are grossly escalating the loss. This is not just an ecological devastation issue, this is also about food insecurity and the future of farming in VT. 

Senate Agriculture Committee Chair Russ Ingalls (R- Essex) welcomed the bill to the table for an honest conversation, specifically because the agriculture committees have been deeply concerned about the loss of farmland, an issue regularly brought to their attention by the Agency of Agriculture. 

Overall, there was extensive and intense testimony exposing the problems with no responsible siting guidance for solar projects which take up vast tracks of agricultural land and forests. 

Exponential losses are projected due to the current RES. 

Despite the depth of understanding that surfaced and the need for legislation to protect forests and farms from predatory solar projects, REV’s power took hold and this bill was shut down by Senate President Pro Tem Phil Baruth ( D-Chittenden-Central), Senator Watson (D-Washington)and Senator Plunkett (D-Bennington). 

A devastating outcome for all who testified in favor of this bill to protect Vermont’s fields, forests and ecosystems and prevent corporate abuse of VT. 

Senators Ingalls (R-Essex), Heffernan (R-Addison) and Collamore (R-Rutland) on the Agriculture committee were constant in their attempts to move this bill forward and offer the PUC better tools to ensure renewable energy projects were located in preferred sites that serve Vermont. This was the intent of the bill and the PUC did support this.

It was not clear where Senator Major (D-Windsor) landed on this issue but he did offer a statement when committee discussion became heated with a solar developer who was very upset about this bill and expressed his frustration, 

Major explained that “We will do in the best interest of Vermonters… “ I would like to think he would follow through. 

Yet another disturbing aspect of this problem Vermont faces due to the Democratic leadership’s refusal and failure to address this issue despite opportunity, is that many solar developers turn around and sell their projects to private equity companies such as Greenbacker and Sea Oak Capital. 

These billion dollar investment companies are the entities actually receiving these major tax breaks while Vermonters shoulder the resulting tax burden and pay more for this power generated via the destruction of the environment. 

As if it couldn’t get worse, it is worth noting that there are also projects in which Vermont bears the ecological devastation but does not receive the power or the RECs.

Instead these are sold to other states as they strive to meet their own aggressive renewable energy goals. 

Due to incentives offered at the expense of Vermonters and our environment, these developers seek Vermont out which results in VT becoming a plantation for RECs to be sold for high value to claim renewable energy. 

NextEra’s Coolidge Solar in Ludlow, VT is a 20MW project covering ~ 90 acres of agricultural soils and forests decimated to create space for a project that sells all the power and RECs to Connecticut to claim they are ‘renewable’. Not sure the words for this, but we must ensure this does not become the pattern.

PUC Commissioner Margaret Cheney pointed out this issue in her concurring opinion within the Shaftsbury decision, noting no existing power purchase agreement for the project and Vermont’s relatively cheap land in relation to other New England states. 

Commissioner Cheney voiced concerns over the clear cutting of forests for these projects due to their role as massive carbon sequestration sinks. She questioned if the projects would ever offset themselves after this extensive forest destruction. 

Vermont is 78% forested and has the lowest levels of greenhouse gas emissions compared to all other states. 

Carbon is not Vermont’s problem. Without siting standards and clear guidelines around solar development, Vermont’s environment and ratepayers are aggressively under attack. 

Sadly, VT has created a situation or really REV, Vermont Public Interest Research Group (VPIRG), and other faux ‘environmental groups’ have created policy supported by many Democratic legislators that offers perverse incentives to a special interest industry destroying our environment and making us pay more for a basic necessity – electricity.  

Worse this is done under the guise of benevolence and a savior mentality chanting claims of societal benefit. Always an excuse to justify the destruction. Let’s call this out for what it really is – incentives for an industry to create billions in profits at the expense of Vermont.

As a private property advocate, there is no problem with a landowner trying to create additional revenue to cover expenses. However, these projects would never see the light of day on farmland and forests if these developers were paying their fair share in taxes and utilities were not being forced to buy this expensive, unreliable, intermittent renewable energy. 

This is a gross distortion of fair markets and is increasing this dilemma of the RES and the sketchy RECs game in VT. 

Destroying the earth to ‘save the earth’ is the worst hypocrisy. 

If legislators, and the House Environment Committee in particular at this time, are serious about looking out for the environment, then this issue of solar siting on farmland and forests must be addressed and the gross incentives, including the RES, removed. 

It is beyond frustrating to witness concerns about forest fragmentation, habitat corridors and ecological sensitive areas while we allow and even incentivize abuse of Vermont’s environment by an industry that has accrued far too much power and control over legislators elected to represent Vermonters.