Solar project nears tax deal

The Potsdam Town Board Tuesday night passed a resolution to introduce proposed Local Law 2019-2: Regulation of Solar Photovoltaic Systems, and set a public hearing for 6 p.m. July 23.

WATERTOWN — Negotiations for a prospective tax abatement deal for a Toronto developer’s community solar project can commence after receiving a nod from county economic development officials Thursday.

The Jefferson County Industrial Development Agency deemed OYA Solar Inc.’s application for a payment-in-lieu-of-tax deal complete, allowing staff working for the agency to begin discussing terms with the affected taxing jurisdictions. The developer wants abatement for new property taxes established after it constructs its 20-megawatt community solar project in the towns of Orleans and Clayton.

“We went through the project in great detail,” said agency Treasurer Robert E. Aliasso Jr. “Very revealing in their information.”

Developers of community solar projects sell energy directly to consumers, and their projects are designed to provide energy and financial benefits to multiple buyers through shared use. Subscribers to community solar projects are expected to receive savings because the arrays earn cost-saving credits from generating electricity.

OYA wants to build four arrays, each one 5 megawatts, with a combined 88,000 panels spanning five properties in Orleans and in Clayton for the project. The developer, however has no plans to own it.

Greg Rossetti, a principal of OYA, said his company has established an agreement with NextEra Energy Inc., Juno Beach, Fla., to eventually take ownership of the arrays. Selling projects to investors like NextEra Energy is essential to OYA’s business model, Mr. Rossetti said, adding that the Florida investor has become involved in its Jefferson County community solar project.

“We’re still very much involved in the development of the project,” he said. “I have a personal relationship with these landowners now that I don’t think it is ever going to go away.”

The Toronto developer hopes to secure a PILOT that would allow it to pay $5,496 per megawatt annually, but the particulars of the prospective PILOT will be fleshed out amidst talks between the agency, developer and affected taxing jurisdictions. The jurisdictions include the county, towns and at least one school district, the Thousand Islands Central School District.

Mr. Rossetti said the firm’s financial structure for the project follows guidelines from state Energy Research and Development Authority, which also incorporates recommendations for tax abatement deals for municipalities. Financing community solar projects requires PILOT agreements, Mr. Rossetti said, adding that it will also help him obtain funding from financial institutions.

“This is likely the single best use for that land, if you’re looking at it from purely a tax-revenue generating standpoint,” Mr. Rossetti said.

Tax deal negotiations for OYA’s project also come as the Jefferson County Board of Legislators considers amending energy policy to address projects like community solar arrays.

Legislature Vice-Chairman William W. Johnson, who also sits on the JCIDA board of directors, said the new regulations will address community distributed generation projects, which include solar, farm waste and wind; that are 25 megawatts or less by creating guidelines for taxing them and crafting PILOT deals for them.

While the county has a policy that requires developers of alternative energy projects with an output greater than 25 megawatts pay an amount equal to full taxation regardless of whether a PILOT is in place, Mr. Johnson said the officials have expressed a willingness to negotiate tax deals through PILOTs for smaller community projects. The Legislature passed a new law in December would require commercial solar projects to enter into a payment-in-lieu-of-taxes agreement with the county instead agreements facilitated by the state under State Property Tax Law 487.

Legislature Chairman Scott A. Gray said community distributed generation projects would by taxed a dollar-per-megawatt value. In terms of establishing a PILOT, Mr. Gray said he at least wants developers to provide evidence of serving users in the county on an annual basis.

“We’re hoping to have something to present to the (Legislature’s) finance and rules committee by the end of the month,” Mr. Johnson said.

Johnson Newspapers 7.1

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