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Dozens of SC solar farms on hold, pending tax relief

More than 90 solar farms in South Carolina, accounting for 1,100 MW of generating capacity and $1.4 billion in capital investment, will be built in the next few years if the state enacts property tax relief proposed in the legislature, according to a solar trade group. Senate Bill 44, which passed overwhelmingly in the state Senate last month, would exempt 80% of the value of commercial renewable energy systems from state property taxes and 100% of the value of leased residential systems. Similar legislation is under consideration in the House of Representatives.

"With this exemption, developers would move forward in the next two to three years," said Bret Sowers, chairman of the South Carolina Solar Business Alliance. "We want to pay property taxes but we want it to be consistent," said Sowers, who doubles as a vice president at Charleston-based solar developer Southern Current LLC. Currently, developers seeking exemptions from state property taxes must do so at the county level.

The solar farms currently on hold in South Carolina range from 1 MW to 80 MW in size, according to Sowers. "Some may move forward without the exemption, but it may take 10 years," he said. "In order to spur growth quickly, we need a state-mandated tax cut. It's a question of how fast the state wants to move." Sowers said the tax relief is justified because, as opposed to manufacturing and other businesses paying property taxes, solar projects do not require the same level of public infrastructure investment, such as water, sewage and roads.

Similar tax treatment for renewable energy facilities in neighboring North Carolina has helped make that state the second-largest U.S. solar market on a cumulative basis, he added. South Carolina, by comparison, is ranked at No. 27, according to a recent report.

The proposed tax exemption would reduce property tax revenue for commercial renewable energy installations in the services territories of Duke Energy Corp. subsidiary Duke Energy Carolinas LLC and South Carolina Electric & Gas Co. by an estimated $713,000 for the 2017 tax year, according to a legislative analysis of S.B. 44, in addition to reducing revenue by up to a maximum of around $1 million for leased residential systems.

The House version of the bill currently is under consideration in the House Committee on Ways and Means.