Bankruptcy, “Sun Tax” May Threaten Solar Project

When a California solar energy company in charge of a 7,000-acre project in Blythe, Calif. filed for bankruptcy, many in the desert wondered what that would mean for the thousands of jobs it was supposed to bring to eastern Riverside County.

The project is now looking for a new buyer to take over the $6 billion project.

The prospects for the project may not be great, according to the executive director of the Independent Energy Producers Association (IEPA), Jan Smutny-Jones, who said the global industry has faced a number of roadblocks.

“And in Riverside County a number of projects are also facing the additional challenge of a sun tax,” Smutny-Jones said.

The supervisors passed a yearly $450 fee on every acre of land used for solar projects. That adds up to more than $3 million a year for the 7,025 acre Blythe project that owners wouldn’t have to pay elsewhere.

Supervisor John Benoit wouldn’t comment on the project because IEPA is suing the county over the fee, but a spokeswoman says they dispute the claim that the fee hurts companies. Currently solar projects receive tax breaks from the state and subsidies from the federal government.

Solar Trust of America filed for Chapter 11 protection after it was unable to meet a deadline for an Energy Department loan guarantee. The company has struggled since its parent company, Solar Millenium LLC, filed for bankruptcy amid the European debt crisis.

The filing comes amid the ongoing controversy surrounding Solyndra, a solar firm that received a half-billion dollar federal loan and was touted by the Obama administration before declaring bankruptcy last year.

Interior Secretary Ken Salazar and California Gov. Jerry Brown were on hand last June when Solar Trust broke ground on a 1,000-megawatt project in California. The project was touted as the world’s largest solar power plant and a keystone of the Obama administration’s efforts to promote solar energy.