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Citizens foot the solar bill

TWO VIEWS • Solar highways provide renewable energy, but are they a good deal for citizens?
by: Jaime Valdez, The nation’s first highway solar project at the Interstate 5 and Interstate 205 interchange in Tualatin has operated since 2008. While our opinion writers agree that Oregon should be a solar leader, there is disagreement about whether the current subsidies are justified.

Oregon aims to lead the nation in the building of 'solar highways' - arrays of solar panels placed on public lands next to roads to provide green energy for lighting.

With one array in operation at the intersection of Interstate 5 and Interstate 205 and three new projects in the planning stage, we're clearly ahead of every other state. But before we build more, we need to find a better subsidy and ownership model. As it is now, we citizens are paying the total cost of the first project, but it's being given to privately owned PGE, which then sells the energy back to us.

When we build highways, we pay developers to complete the job. But then the public owns and uses the highway for free. We need an ownership model for solar highways that is just as fair.

Solar energy brings family-wage jobs and reduces pollution. It's good for Oregon and for the planet, and deserves public support. The first relatively small $1.3 million project was a test: 'Can we do this.' It admirably used Oregon expertise and suppliers, proving our ability to innovate. And, it works so well that a $1.4 million expansion is planned. But when we taxpayers totally pay for something, we should own it.

Take the planned $20 million solar highway project along I-205 in West Linn. Under what the Oregon Department of Transportation calls an 'Innovative Partnership,' as state taxpayers we'll cover 50 percent of the cost with Oregon's Business Energy Tax Credit. Meanwhile, as federal taxpayers, we'll cover another 40 percent with Investment Tax Credits plus an American Recovery and Reinvestment Act/Stimulus Grant.

Using utility ratepayer funds, the Energy Trust of Oregon will likely contribute another 10 percent toward costs. Yet, in spite of having received 100 percent of the cost from the public in tax credits and grants, the owners will depreciate virtually all of the cost on their taxes, adding another 12 percent to 32 percent in public subsidy. This brings the grand total of public subsidies to more than 100 percent.

If the ownership of this planned project is structured the same as the first project, PGE's private shareholders end up owning the facility after John and Jane Q. Public have paid for it. In exchange for all these public investments, PGE will permit ODOT to buy electricity at the standard rate, rather than the higher green-source rate.

If we add the $20 million West Linn project, two additional projects being planned - one at the Baldock Rest Area on I-5 south of Wilsonville for $11.1 million, and one in Southern Oregon for $13.6 million - together with the $1.4 million expansion of the original project at the I-205 and I-5 intersection, the total will be $46.1 million. The 50 percent tax credit subsidy alone will eventually cost Oregon taxpayers more than $23 million of that total.

Over-subsidization is one reason the Legislature, at its February session, should both override the governor's veto of House Bill 2472, which placed lower caps on subsidies, and implement better subsidy and ownership models for the next solar highway projects.

To get ready for February's legislative session, the governor should direct ODOT to design several models for presentation to the Legislature that improve on what we have now - public funds going directly to the private sector.

It's worth noting, too, that Portland Public Schools, Multnomah County and local non-profits are using the same flawed subsidy/ownership model when they put solar panels on rooftops, because that's what's available under current state and federal law.

New approaches developed for the ODOT projects could be adopted by municipalities and non-profits across the state.

Oregon is becoming established as a leader in implementing solar highway technology. Leadership requires us to discover the most equitable and effective models for both public subsidies and ownership.

Our quest for green energy should not invite green profiteering with budget-busting giveaways of our dwindling tax revenue.

Jody Wiser is chairperson of Tax Fairness Oregon. Patrick Story is a volunteer for Tax Fairness Oregon.