A possible tax abatement request from ENGIE North America, one of the two companies behind a proposed solar farm in eastern Howard County, is receiving a lukewarm response from county officials.
Multiple County Council members interviewed by the Tribune say they have reservations about the idea of approving any tax abatement for the large-scale project.
Most County Council members give multiple reasons for their reservations, but all point to one fact: the proposed solar farm would not create many long-term jobs.
According to ENGIE itself, its proposed 200-megawatt solar farm would create three to five permanent jobs for operations and some 300 temporary jobs during construction.
“Solar panels are not economic development,” County Council President John Roberts, R-District 1, said. “There are no large amount of permanent jobs that come with these projects. Solar panels don’t shop in our stores, they don’t eat in our restaurants and they don’t go to our schools. Why would we give them a tax abatement for economic development?”
THE OFFER
ENGIE has yet to formally ask the Howard County Council for a tax abatement for its proposed 200-megawatt Emerald Green Solar , but possibilities the company has discussed with county elected officials have included a 10-year 100% or graduated tax abatement on personal property, according to county officials.
If a tax abatement is approved, ENGIE has proposed making economic development agreement payments to the county to partially offset the loss of tax revenue due to the abatement, county officials say.
It’s unclear the total the company’s payments would be, but if it’s anything similar to agreements struck in other counties across the state, it’s likely in the several millions of dollars range.
Such agreements are not uncommon with other solar farm projects in Indiana.
In nearby Cass County, NextEra Energy agreed to pay the county $9.3 million over five years that can be used on quality-of-life initiatives. In return, the county approved a 10-year, 100% abatement for its Walton-area 200 megawatt solar farm.
In Putnam County, Arevon Energy and the commissioners negotiated nearly $6 million in total payments, but the proposed solar farm was ultimately rejected by the county’s board of zoning appeals.
The Howard County Board of Commissioners have approved road use, drainage and decommissioning agreements between the county and ENGIE but not yet an economic development agreement. That’s largely due to the apprehension over the approval of a tax abatement.
Howard County Commissioner Jack Dodd told the Tribune he would like to see the County Council approve a tax abatement as it would allow the county to spend the money on a capital project or quality-of-life initiative.
Without one, he said the chances of the commissioners negotiating any payments from ENGIE are “greatly” reduced.
“What could we do without an abatement?” Dodd said in relation to negotiating any economic development agreement payment. “I’m not sure. … It sure restricts what we can negotiate. It restricts it a lot.”
In a statement provided to the Tribune, Julie Vitek, a spokesperson for ENGIE, said the company would “welcome the opportunity to connect with Howard County Council members to discuss (a tax abatement), just as many other businesses have.”
The company did not address a question on whether not receiving a tax abatement would affect the solar farm project or not.
Vitek also highlighted its potential economic development agreement payments as something that would give the county “long-term budget certainty.”
“Howard County can then choose to chart its own path, investing in the people and programs most important to residents, whether for public safety, health and human services, education and training, all while having long-term budget certainty,” she said.
COUNTY COUNCIL COMMENTS
While ENGIE has yet to formally request an abatement, any such request is going to face opposition from the County Council.
The Tribune talked to five of the nine County Council members — Roberts; Vice President Daryl Maple, R-at large; Brett Sanders, R-at large; Martha Lake, R-at large; and Frank Faulkner, R-District 2 — and all expressed at least some reservations about the abatement request.
All five pointed to the low number of jobs being created as a major reason why they lean toward being against any abatement request. Most, though, were open to hear any request from ENGIE if they were to formally make one.
“It’s definitely tricky because it’s not a traditional abatement where they’re bringing in 1,000 jobs,” Maple said. “It’s more an assessed value increase. It’s a tool (an abatement), but I don’t know if it’s the right tool (in this situation).”
Faulkner said he was originally leaning toward granting the abatement, but in recent weeks, he’s become more unsure on where he stands.
“I don’t have a clear picture yet,” he said. “I’ve been indecisive on this, and I’m open for some other comments and followup.”
Lake, a former county auditor, said she believes it would be more profitable overall for the county if the solar farm is not abated.
According to ENGIE, the Emerald Green solar farm would pay tens of millions of dollars in tax revenue over the life of the project, which is expected to be around 30 years.
That said, because of the fact the state of Indiana puts a maximum on the amount local governments can raise from property taxes each year and most local governments tax near their state maximum levies, some of the added assessed value due to the solar farm being built will not generate new revenue.
Instead, as Larry DeBoer, a professor of agricultural economics at Purdue University, points out in his February 2023 column “Solar Energy Projects and Property Taxes,” the solar farm project would likely reduce the property tax bills of the property owners in the area it’s built in.
“Solar projects will pay taxes that replace some taxes paid by existing taxpayers,” DeBoer said.