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Solar isn’t powering local budgets
But that could change with legislation that would force some lease revenue to be diverted to states, counties
STEVE MARCUS / LAS VEGAS SUN file
Nellis Air Force Base hosts one of the nation’s largest solar photovoltaic systems. The Nellis array provides enough electricity to power thousands of homes.
Friday, Sept. 4, 2009 | 2 a.m.
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Nevada might aspire to be as successful with solar energy as Saudi Arabia is with oil, but it faces numerous obstacles before it can cash in.
A good place to start would be getting compensated for the use of the land.
Nevada is the focus of solar efforts because it has plenty of sunny, flat, open land near transmission lines. But the state doesn’t get to deposit any checks when developers cover that land with solar arrays. Most of the land sought by solar developers is under the jurisdiction of the Bureau of Land Management, and revenue from those land leases go to federal, not state or county, coffers.
Nevadans who live and play near proposed solar or wind power developments say they’re giving up their scenic views, wildlife habitat and recreation areas to support a national imperative with few local long-term benefits. But that could change if Congress passes legislation mandating that some of the money paid for land leases for solar arrays and wind farms be returned to home states and counties.
That’s being done on geothermal leases. Because of the drilling involved, geothermal energy plants have long been classified as mineral extraction operations under federal leasing rules. A quarter of the money from the land leases — including bonus bids, rentals and royalties — goes to the Bureau of Land Management, but the other 75 percent is sent to the home state (50 percent) and the home county (25 percent).
Since the BLM started auctioning parcels for geothermal leases in 2007, income from them has been rolling in.
That year, Nevada got $5.85 million. From the 2008 auction, Nevada reaped more than $14 million. The most recent auction, in July, sent only about $4.45 million to Nevada, with the drop blamed on the fact that financing had dried up as a result of the banking crisis.
Still, it’s $4.45 million more than the zero dollars Nevada would have gotten for any solar energy leasing of federal land.
As of May, solar developers had applied for leases on more than 33,900 acres in Nevada. Some parcels have multiple applications.
But under current rules, the first developer to file the application gets the first crack and there’s no competitive process. An auction of the land sought by solar developers across the Southwest would likely bring lower bids than on geothermal leases because solar developers have a smaller profit margin, but it would still generate income for a state in dire fiscal crisis and help diversify the economy.
Solar developers are prepared to fight legislation proposing such a change because it could drive up costs. They scuttled attempts by Nevada state legislators to tax renewable energy exports.
But some in Congress want to see states get a cut of the money that will come in as the BLM approves solar leases in the coming years.
That is one of the issues Senate Majority Leader Harry Reid’s office will give more attention to this year when the Senate considers energy and climate legislation Reid spokesman Jon Summers said.
The Renewable Energy Permitting Act, which Reid and Sen. John Ensign, R-Nev., introduced in May, and Reid’s Clean Renewable Energy and Economic Recovery Act, introduced in February, both include provisions for sharing lease revenue on solar and wind projects with the home states.
The bills aren’t terribly controversial, but the latter was reportedly neutered in committee nonetheless. It no longer requires that the majority of new transmission be from renewable sources.
In any case, amid health care reform and carbon cap debates, neither has gained enough steam to make it to the floor of the Senate.
The American Clean Energy Leadership Act of 2009, sponsored by Sen. Jeff Bingaman, D-N.M., is expected to see action on the floor this fall. It includes clauses indicating that federal agencies should be directed to give taxpayers a good return for renewable energy leases.
If the American public is going to hand over to developers lands the federal government manages for it, they should get something in return.
That’s for American taxpayers in general, not just those in the new renewable developments’ home states. But it may at least stir up talk of sending some of that money to the states where the land is being used.
Sun reporter Lisa Mascaro contributed to this story.
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This pretty much negates what Goober is saying that energy is the new "gaming industry". Especially if we have Reid and Enstench pushing the Renewable Energy Act.
As with what Nevada gets from the mining industry, "energy" will be a minor revenue stream and very much - too little, too late for the budget crisis coming in the next few years.
If our illustrious politicos REALLY want to do something for Nevada, why not start with getting LV some WATER and stop trying to hijack it from everywhere else? Without some real monsoons up river real quickly, LV will have tapped out Lake Mead in about 2 years and there won't be any need for power there - renewable or otherwise.
Hey guys: Nevada needs to do what Alaska does with its oil. Slap a fee on every barrel exported to other states/countries. A fee for every KWH will work too...
Solar power will only become cheaper as time goes on. Nevada has the amazing potential to fill its empty deserts with solar cells that will produce enough power to bring in a steady revenue stream from other states and countries.
texexnv, how do you suppose we can get more water by not tapping it from other sources? Farming in the desert was a foolish idea in the first place and that water should be used for Vegas. If Vegas goes down, Nevada loses its one and only major urban center (the Reno metro area doesn't even exceed a half million people). Nevada would have a tiny economy without Clark County.
We need to take advantage of the low contracting costs now. Creating a more efficient system for encouraging solar development is key.
Nevada is losing on several fronts with the current solar power scheme. We are losing thousands of acres of our PUBLIC land, which is being given away or sold for cents on the dollar, to PRIVATE companies who stand to make huge profits from this land. But these same companies will be returning very little if any revenue to Nevada.
Nevada is also losing thousands of acres of PUBLIC land that is used, and has been used for may years, as recreational areas. The many OHV recreational groups spend thousands of dollars in local markets each year. Many more dollars in State revenue will be lost when the recreational dollars are reduced or spent elsewhere.When you take all of the family recreational areas out of a State, people will take their recreational dollars out of state to places that have not given away their PUBLIC land to private corporations. What happens if these people decide to stay away, taking those tax and market dollars with them?
Growing up in southern Nevada the recreational oppurtunities offered in the area were boundless. They were passed on to me, and I have passed them onto others. If we continue to give away our PUBLIC land to corporations who gobble it up as fast as it can be given away, to be used by so many other people out side of our State which receives limited benifit form it, what will be left to pass on?
Supertrunk is right. Outdoor recreation is an important part of our economy. All the money spent on equipment, vehicles, accessories, supplies,etc. by residents pays sales taxes to our state. Tourists who come into town for Lake Mead, desert racing, etc. bring us money. Taking all of our land away will hurt this industry. Solar must co-exist with existing land users.