Selling green electricity to the grid at 45 cents/kwh and losing money doing it
What’s wrong with the following story?
CHARLESTON TOWNSHIP — Last August, owners of a new solar-energy business here said they were committed to “doing something that’s never been done in Michigan.”
But that hope has taken a hit under state tax assessment guidelines.
Kalamazoo Solar owners are appealing the company’s first property-tax bill of $27,394, which they say is higher than the retail value of a year’s production of electricity by the farm. The energy generated by the solar farm, which began operating in February, is being sold to Consumers Energy under a 12-year contract.
The company’s 3-acre solar farm on East L Avenue was assessed at $578,700, said attorney Sam Field, who leases the land from Rick Schmitt, a minority owner in the farm. Its 756 solar panels were “literally assessed (at) 2.2 times more … than what we paid for them,” he said.
“I am not a person who doesn’t like to pay his taxes,” he said. “I’m not remotely against paying taxes, but the tax bills should be for the right amount.”
Field said the State Tax Commission’s manuals are out of date and don’t reflect how prices of solar equipment have decreased as renewable energy has become more popular.
The answer comes further down in the piece.
Consumers Energy is offering incentives to encourage the building of solar farms. Kalamazoo Solar, for example, is earning 45 cents per kilowatt hour from Consumers, Field said.
Let’s put that in perspective. In Texas, no favors, at retail, electricity is offered at eight to nine cents per kilowatt hour. Here is the link for that rate: http://www.texaselectricityrate.com/counties/stephens.html
Closer to home, here are the electricity rates available to customers in Michigan: http://www.keyframe5.com/michigan-natural-gas-electricity-prices-april-2011/
They range from 5 to 25 cents per kwh.
The solar farm is getting paid 45 cents a kwh, and losing money at that.
Look, I don’t really care that real estate taxes on the solar farm are on the high side. I care that we as a society are paying five to nine times retail for green energy sold into the grid.