Cover Story - Solar Power: The growing debate about using prime agricultural land for power generation

Friday, April 3, 2009

by MIKE MULHERN

Farmers worry about stray voltage and land values, councils are concerned about the lack of tax revenues from solar power development, but the provincial government seems determined to press ahead

Farmers concerned about whether a solar farm could end up their neighborhood should look up – way up. Developers wanting to locate solar farms don't just need land, they need access to certain kinds of power lines which allow them to hook into the grid.

David McGarry, president and CEO of Elecsar Engineering Ltd, of Sarnia, says that solar farming is all about line location. A solar farm, he says, "has to go on the existing medium voltage feeders and you've got to pick a main trunk feeder, otherwise it costs too much money. It's between 100 and 200 bucks a metre to put in a feeder."

Prime agriculture land, if it happens to be near a 27,600-or 44,000-volt line, becomes an ideal site for a solar farm and there's not much local farmers or municipalities can do about it because the province allows solar and wind farms on agriculture land. The province went one step further recently when it announced that it would legislate away any barriers, such as local bylaws, that hold up renewable energy projects.

People living next to solar farms are left to wonder and worry about declining property values and stray voltage. Whether those fears are real or imagined depends on what you believe and who you talk to.

"The province wants 15,000 megawatts of power created by green energy and so we're gonna have these (solar farms) spread all over the province of Ontario," says Gord Schermerhorn, Warden of Lennox and Addington County. There are three large projects approved for his municipality, all being developed by SkyPower and SunEdison. One of them, at Stone Mills, is under construction. One of the three, Schermerhorn says, may be in doubt because the developer is now concerned that it may be too far from a feeder line, a deal-breaker in the solar farm business.

"What I'm saying," Schermerhorn says, "is that I think the province has acted too quickly on this. It's nice to say we want green power, but to have solar farms spread all over Ontario, I don't know whether that's good."

He believes that trying to block a development approved by the Ontario Power Authority (OPA) could land any municipality in a costly Ontario Municipal Board (OMB) hearing. That's already happened in East Hawkesbury Township, part of the United Counties of Prescott and Russell in eastern Ontario.

The province got actively interested in renewable energy in late 2005 and early 2006. That's when they came up with a price for solar power of 42 cents a kilowatt hour. That price was adjusted in mid-March and varies depending upon the scale of the project.
About 300 people, mostly homeowners and small businesses, took the province up on the offer and signed agreements with OPA. About 50 of those were contracts for large, multi-million-dollar installations of eight, nine or 10 megawatts.

"We were looking to determine the value of electricity and determine a price that reflects its value," said Jim MacDougall, manager of distributed generation at OPA. Through the request for proposal process, they came up with 11 cents a kilowatt hour "for the base price for pretty much all technologies." That 11-cent mark was retained for wind and biomass, but not for solar.

"The government indicated that they saw photovoltaic technology as a strategic area for providing an incentive and they requested that we pay a price that would significantly drive development," MacDougall said. "We considered 42 cents a reasonable price to get things started, because we had been told by a number of stakeholders that the cost, from our internal analysis, would be in the range of 80 cents for a small residential project and 40 to 50 cents for larger projects." 

On May 13, 2008, the government imposed a moratorium on executing new contracts for large green energy projects. The exceptions to that moratorium were projects on a residential scale of up to 10 kilowatts and on-farm anaerobic digester projects of less than 250 kilowatts.

Although 50 large solar contracts had been let by OPA, only the Stone Mills project and the 60-megawatt OptiSolar Farms Canada Inc. project in Sarnia were underway. In fact, OptiSolar, a subsidiary of California-based OptiSolar Inc., started producing a small amount of power at its 1,150-acre Sarnia site in December of 2008. Peter Carrie, vice-president of OptiSolar Farms Canada, said that OptiSolar expects to begin producing 10 megawatts of power this summer and have all 60 megawatts up sometime in 2010.

OPA's MacDougall said that, when the moratorium was declared, demand for large solar projects "was way over what we had expected," but there were other problems too.
"One of the problems we heard from the industry was that we were making it too easy for people to get contracts and not demanding enough of them to demonstrate that their projects were real, or if they were actually developed or mature." The pretenders could get in the queue and prevent others from developing their projects because there's finite line capacity. "What happened is they would get the contract and there's only so much capacity on a wire to connect supply, so they would prevent other people from getting connected."

While OPA was tasked to take a hard look at process and compliance, it was not asked to review whether using prime agriculture land for solar projects was an issue.
"We've heard from our colleagues at the agriculture ministry that they had some concerns about land usage, but that didn't get into the OPA's review of issues," MacDougall says. "We weren't asked to put in any restrictions on the program for prime agricultural land."

Flashpoint in East Hawkesbury
The issue of "prime agricultural land" has come up in one or two parts of the provincebut, in East Hawkesbury, it has become a flashpoint over a development planned on two farms located halfway between Saint Eugene and Vankleek Hill.

Greg Pruner, president and CEO of Solaris Energy Partners Inc., the Ottawa-based developer, says that the project had a good beginning.

"We actually met with the mayor and council. We got their blessing, made a presentation to council and worked with their planner. They were quite excited about the economic development."

There was a brief search for potential locations on more marginal land, but there were environmental objections, so they settled on two sites – a 175-acre farm on Concession 10 and a 125-acre farm on Concession 6, That's when neighbors raised concerns and the council had second thoughts and blocked the development for one year to do a study.

Shawn Wylie and his father Donald have a dairy farm on Concession 10, next to the 175-acre site. Wylie, 27, knew that both sites had something all solar farms need, a connection to the grid and Pruner agrees. He says that the line was "absolutely crucial" to the site selection.

"Basically, the neighbours are against this," Wylie says. "There are five large dairy farms surrounding it and they are all opposed to it going in. There's probably another 10 to 15 just regular residents and they're opposed to it." Their position, like that of the Ontario Federation of Agriculture, is that solar farms should not be located on prime farmland.

Stefan Kunz, who moved to Canada from Switzerland 15 years ago, has a dairy farm close to the Concession 6 location. He's worried about stray voltage. "That's the biggest one," he said. "We push the (issue of) prime farmland as a group, but for me it's stray voltage." The other question for Kunz is land value. "I wouldn't buy a farm so close to something like that."

After council placed a one-year moratorium on the project in August, the developer turned to the OMB for relief. From the developer's point of view, the project had to be completed in three years to satisfy the terms of their agreement with OPA.

East Hawkesbury Mayor Robert Kirby says that he and his council wanted to study "a number of things" before going ahead with the project. Now, they have to shoulder the bill for an OMB hearing to defend their decision. Kirby says the fact that the sites are on agricultural land is regrettable, but there are other things that weigh on him, including the cost of the OMB hearing. "It could cost us as much as $80,000. It doesn't make sense," he said.

Need for reassurance
Defending their decision to study the project, Mayor Kirby said that council has to be sure it is making the right choice. "We've heard some people say it's a health hazard. How do we know if it's a health hazard? I want somebody to assure me of this because we don't have a lot of knowledge about solar farms. We want all these things to be addressed so that, when we decide, there's no comeback on the township."

He maintains that the township is not against solar energy, "but it's a new thing in our area and everybody's asking questions. Did you check this? Did you check that?" Kirby is also concerned about how little the township will be able to collect in taxes when the project is complete.

"You call it a solar farm, I call it an energy plant," he says. "They are spending $250 million in our township and all we're getting back is five to six thousand dollars in tax revenue" – all that tax guidelines will allow the township to collect.  "I don't think that's fair. I've got houses here that pay more taxes than that."

Kirby says that he'd like to see a tax bill for the project of "at least $40,000 and I don't think that's going too high." He says that a steel mill in a neighbouring township pays so much in tax that the township is able to keep residential taxes lower, something he'd like to see the solar farm do for his municipality.

"We have river-front property," he says, "and they get taxed like a son of a gun. Why should they pay more than this big energy plant? It's not fair."

Even before the March OMB hearing, Pruner was optimistic that the 35-megawatt project, which he says will come in at $200 million, will be under construction in June or July and completed by summer 2010. And, he argues the company will continue to farm the land by grazing 80 sheep beneath the solar panels.

"We are importing German best practices," he says. "The early adapters in Germany were farmers who embraced this technology. This is widespread in Germany and particularly on farms. One of the best practices we're importing is the dual use of land. We will be grazing livestock on the land for the length of the project."

Moreover, Pruner counters fears about stray voltage too. "We actually connect at the distribution level. There is no way we could ever create stray voltage.

He has support in his view from Elecsar Engineering's David McGarry, whose company does high-voltage engineering for renewable energy firms,. He says that the stray voltage issue is a "red herring," adding that "if it's properly engineered, there should be no stray voltage. And, it can be engineered so there isn't any." BF