Solar panels on farmland spur debate about development, taxes
SHELBURNE — Gregg Beldock got a letter from the Vermont Tax Department in May.
Beldock and his wife have a working farm in Shelburne on 150 acres. They have that land in the state's current use program, which allows productive farm and forestland to be taxed at a rate lower than its market value. A solar array covers a little less than 1 acre of their property.
But, after several months of discussions, the state requested that Beldock remove that piece of the farm from the current use program. The letter, from Elizabeth Hunt, the program's director, informed the Beldocks that the "land around the solar panels is considered developed and will have to be removed from the program."
Beldock's experience prompts a broader question: What place, if any, does renewable energy have on Vermont's agricultural lands?
Beldock called the Tax Department's determination that the solar array is development "outrageous." The land underneath continues to function agriculturally, he argues. The panels are unfenced and are far enough above the ground that sheep graze below them — the same as they did before the array was there, he said.
"The land use program is intended to preserve those types of lifestyles," Beldock said.
For Beldock, the issue is more than personal. He is CEO of Bullrock Deutsche-Eco Solar, one of the largest solar energy development companies in the state. He said this is an issue for farmers with land in the current use program across the state.
The use value appraisal program, established in 1978, was devised to slow development of undeveloped land by lowering property taxes on acreage used for agriculture or forestry purposes. As of last year, some 18.4 million acres were enrolled in the program, or a third of the state's total area, according to the Tax Department.
Beldock argues that restricting development of renewable energy projects on current use land is counter to the program's aim. Leasing land for solar arrays can be an important source of revenue for farmers, he said.
"That income can make a difference between live or die for a farm, and being developed in totality," Beldock said.
The question of how solar panels fit into Vermont's agricultural landscape is not a new one.
According to Doug Farnham, director of the Tax Department's property valuation and review division, the department decided to put together a bulletin on solar panels in relation to the current use law after a considerable amount of confusion arose. The statute on current use does not address solar power.
He said the Tax Department reached out to the Public Service Department, the Agency of Agriculture and a representative from the solar industry in developing Technical Bulletin 69, which was issued in July.
That document clarified that solar energy facilities are allowed on property in the current use program as long as the panels are considered part of a farm operation, meaning that at least half the energy generated goes to farm buildings.
Farnham said Friday that the department is willing to consider allowing exceptions on a case-by-case basis.
According to Farnham, when the Tax Department is made aware of a solar energy project on land in the current use program, it reaches out to learn more. If the project does not meet the criteria in the bulletin, the department asks the landowner to remove the property under the project from the current use program.
If the landowner refuses, the entire parcel of land could be disqualified. The landowner has an opportunity to appeal at a few points in the process. Farnham said he is not aware of many cases where there have been issues around solar projects and land in the current use program.
"We are doing the best at the department to accommodate the changing nature of farms under the existing law," Farnham said.
Ultimately, he said, the property valuation division is working within the constraints of the statute.
"Current use enrollment and the nature of farms going forward is an important conversation to have," Farnham said.
Beldock said the requirement that farmers use 51 percent of the power generated by the installation is unrealistic. Farms do not use that much electricity, he said.
His farm uses just a small portion of the 150 kilowatts generated by the panels on the 0.92 acres of his property. The rest goes to power a senior living community nearby, he said.
Rep. Tony Klein, D-East Montpelier, who chairs the House Natural Resources and Energy Committee, said the issue represents a balancing act.
On one hand, solar could be a boost for agriculture and could have a place under the current use program, especially if the arrays do not alter the land. "We have a lot of farms in decline," he said.
On the other hand, renewable energy structures do not technically fall within the definitions of the current use program, he said. Farmers who lease their land for solar arrays are likely to see more income from those agreements than they would save on the tax break from current use.
"Until proven otherwise, the current system works," Klein said.
However, he doesn't believe the book should be closed for good on the topic. Klein has said he will not seek re-election this year, but he hopes legislators will examine the issue in the future.
"I think that there should be a debate and discussion about it," Klein said.
Sen. Bobby Starr, D-Essex-Orleans, said it's an issue the committee he chairs, Senate Agriculture, has already spent time on.
Starr said his committee wrote legislation this year that would have added language about solar panels to the current use statute, but it did not move forward.
Starr said the crux of the issue for him relates to the quality of the land. If an array is on pasture land that can continue to be used for agricultural purposes, he does not see a problem with keeping it in current use.
"If you put those solar panels up high enough and you can graze, say, sheep or heifers under there, there isn't any reason to have to take that out," Starr said.
However, he said, there should be more restrictions on putting panels on prime agricultural lands, like cropland.
Starr said he hopes lawmakers, particularly those on the agriculture committees, will consider the issue soon.
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