Officials with RES Americas met Monday with members of the Crossett City Council to discuss the necessary steps needed to make an estimated $150 million, 800-acre solar farm south of Crossett happen.
The project has immediate needs that the council can address, officials said. The first would be for the property the solar farm will be located on, which Weyerhauser owns, to be annexed into the city; the second would be for the council to approve a Payment in Lieu of Taxes, or PILOT, program for the project.
“This is pretty large as far as solar projects go,” Lee Morrison with RES Americas said. “We estimate 33,000 solar panels will be on site at this point in the project. They will be lined up north to south and they will track with the sun like sunflowers.”
The company started looking at the Crossett location — which is south of the city limits to the east of Arkansas 133 — in 2016. The project is still in the study period with the Midcontinent Independent System Operator, the energy wholesaler who operates the grid for the region, and environmental vetting still needs to take place, Morrison said.
“We expect to start permitting in 2020 or 2021, and start construction in 2021 or 2022,” he said.
RES has already secured a power purchase agreement with the Arkansas Electric Cooperative Corporation for when the 100-MegaWatt farm is operational. Morrison said it will be able to power approximately 18,300 residential customers when it is at capacity.
The project could cost approximately $150 million, and will generate between 400 and 600 construction jobs, he said. It is not expected to generate a significant number of permanent jobs.
The problem long-term is that if the project is taxed at its estimated assessed value, RES would have to pay $19.6 million in taxes over a 30 year period, a cost that makes the project unsustainable, Morrison said.
If the city allowed RES to enter into a PILOT program — which would essentially amount to a 65 percent tax abatement for that time period — it would pay $6.68 million in taxes during the life of the project, he said. The PILOT would generate $170,00 for local schools each year, and the city and county governments would receive $21,000 annually.
“We need to levelize the taxes across the project lifespan, and we need predictability,” Morrison said. “If we go to the financiers of this project and say, ‘I know what this year’s taxes are but not next year’s,” they will say, ‘You need to take this project elsewhere.’”
RES Director of Development Sean Stoker said other solar projects in the region already had PILOT programs, and those who invest in those projects are much more likely to choose to back projects that have PILOT backing.
“It is trying to put us on the same playing field so the project does become a reality,” he said.
Crossett Economic Development Director Mike Smith said annexing the property and granting the PILOT program would not cause a significant impact on Crossett infrastructure but would net money for the city.
“This is on property that you are presently getting taxes from Weyerhauser, but that is pennies on the dollar compared to what you would get from (RES),” Smith said.
When Councilman Dale Martinie asked how sure RES was the project would move forward, the company representatives said they had been close to 80 percent sure until a recent change in tariffs on Chinese-produced goods significantly increased the cost of solar panels. Getting prices stable will help ensure the viability of the project, Stoker said.
“You have to lock down your supply somewhere in the next 12 to 16 months, order them, get them manufactured and get them shipped,” he said.
Morrison agreed, saying the Chinese tariffs had a large impact. The project was “really rolling along well” until someone in Washington realized that the kind of solar panels RES plans to use were not included in a previous phase of tariffs levied against the Chinese,” he said.
If the project moves forward, RES will plant hedgerows around it for aesthetic purposes, Morrison said, and the inverters the panels are attached to create a sound of approximately 65 decibels.
“If you are standing at the edge, you aren’t going to be able to hear it,” he said.
Smith said the property in question is wet and low, and the project won’t have a negative impact on anyone. In fact, he said the project has had a positive impact already.
Companies that have need for renewable energy in the portfolio have given Crossett “a long, hard look” because of the prospect of the RES project, he said.
“They have passed it on to other companies that we are talking to now,” Smith said.
Martinie said he did not see a downside for the City of Crossett in supporting the project.
“There is definitely a labor base we have here that we didn’t have a year ago, maybe we can turn that around to something good in the short term,” he said.
“I don’t see any risk from our perspective.”
The council did not take any action because the meeting was a work session. Mayor Scott McCormick joined Martinie, Councilman Cary Carter and Councilwoman Sheila Phillips for the discussion.