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Supervisors Extend Solar Energy Moratorium

By Joseph Schany - | Feb 16, 2021

by Joseph Schany

The Palo Alto County Board of Supervisors extended the temporary moratorium on the construction of solar energy conversion systems and related energy devices during Tuesday morning’s regular session meeting.

The moratorium, originally put in place March 10, 2020, was extended due to ongoing concerns over jurisdictional questions, and Iowa legislation pertaining to tax dollars from solar sites. Iowa currently imposes a replacement generation tax of $0.0006 per kilowatt-hour on solar energy, which is imposed in lieu of a property tax on generation facilities. However, according to the Supervisors, financial issues may arise if the solar site is unable to generate electricity.

“I think the Board is concerned that the property tax is going to go away and therefore the county has a possibility of going backwards as far as tax income,” said Supervisor Craig Merrill.

The derecho that devastated parts of Iowa in August was used as an example, with the Board noting had any solar panels been constructed and later been damaged or destroyed, solar would have been unable to produce electrical output and frustrated any replacement tax receipts for Palo Alto County.

“Replacement tax is payable on actual generation from the facility,” said Sheila Tipton, attorney with Brown Winick out of Des Moines, “so if something were to happen – the facility is destroyed or taken down for a length of time – that obviously eliminates tax revenue because there is no generation.”

According to Tipton, the Iowa tax statute is not expected to change anytime soon.

“As far as I know there is nothing pending in the legislature that would alter the replacement tax to exempt solar or to add solar to the special use valuation that is already there for wind.”

Board chair Linus Solberg added, “We are hoping that we can get something worked out at the legislature, that we can get this tax thing solved down the road.”

Read the full article in The Democrat.