Fun with Math

I stumbled across this story on Drudge this morning.

Solar farm near Climax losing money because of property taxes

Producing 225,592 kilowatt hours of electricity in its first year of operation, a solar farm in eastern Kalamazoo Coun­ty that went online in early 2010 has exceeded expectations.

Also exceeding expecta­tions is the property tax, said Sam Field, a Kalamazoo attor­ney and one of the owners of Kalamazoo Solar.

Granted, this is a bit outside the normal fare for my blog fodder, but a couple of things about it jumped out at me.

“The property tax burden on our solar project is 60 times as much as the property tax burden on the [Palisades] nuclear power plant when calculated on a per kilowatt hour basis,” he said.

Um…perhaps that’s because the Nuclear Power plant makes more effecient use of the property they pay taxes on than does your Solar Plant?

Earlier in the same story:

Producing 225,592 kilowatt hours of electricity in its first year of operation, a solar farm in eastern Kalamazoo Coun­ty that went online in early 2010 has exceeded expectations.

So, you produce 225,592 kilowatt hours on 1.1 acres of property (from the picture caption on the story).

That works out to 205,083 KW-h per acre.

So, how does the Nuclear Plant do?  According to Wikipedia, the Palisades Plant produces 5,826 Gigawatt Hours (5,826,000.000 kilowatt hours) of electricity annually, on 432 acres of property. which works out to 12.236 GW-h per acre…or 12,236,000 KW-h per acre.

So, based on some simple math, the Nuclear Power Plant uses the property upon which they are paying taxes 59.663 time more effeciently than the Solar plant.

Coincidentally, almost exactly the difference factor per kilowatt hour of the taxes paid between them.

Seems to me that the two endeavors already have a pretty level playing field when it comes to property taxes, don’t you agree?

Oh…but wait:

The $27,689 tax bill for the Charleston Township prop­erty means that the owners are losing money, even when being paid a premium price of 45 cents a kilowatt hour by Consumers Energy, he said.

“That Michigan property tax burden works out to a cost of 12.3 cents per kilowatt hour,” Field said. “That amount is more than the retail value of the electricity.” [Emphasis added]

Excuse me?  The retail value of electricity is LESS than 12.3 cents per KW-h, but the Solar Project is being paid 45 cents?   What was that about a “level playing field” again?

What that means is that this boondoggle is being funded to the tune of a 375+ percent subsidy on the per kilowatt hour price of the electricity they produce and they’re STILL losing money?

And all that needs to happen for this to work is for them to get ANOTHER subsidy in the form of reduced property taxes.

There’s the current state of Solar Energy for you:  4 times as expensive, 60 times as much land required, and will still be losing money unless they get taxpayer subsidies.

What a bargain.

As an aside:  the lack of journalistic integrity on display in this story is almost breathtaking.  I find it difficult to believe that the “journalist” who wrote this puff piece was too stupid to figure this out at a glance, which means the subterfuge was wholly intentional.

And they wonder why their industry is dying.

3 thoughts on “Fun with Math

  1. Working at a nuclear plant myself, I can say that Palisades more than likely doesn't use all 432 acres. Probably only about 50 acres for the actual power plant. The rest is left as green space (natural habitat for those enviros who love solar), or leased to farmers and ranchers (those people who provide us food). So, while you have been very conservative in your calculations, a realistic look would show that Palisades is not 60 times more efficient, but 600 TIMES more efficient than the solar plant.

  2. I have no inside (or outside for that matter) knowledge into the power producing industry so I was using strictly what was printed in the article and what was listed on Wikipedia for the Nuclear Plant.

    I used the total amount of land owned because that's what they're required to pay taxes on. But, with that in mind, $27.7k sounds awfully high for property taxes on 1.1 acres. I didn't raise the point in the post, but I have to wonder if the Solar company actually owns more land than they have outfitted with panels right now…which, if so, would change the math even more, because it would lower the power generated per acre that they're paying taxes on considerably.

    Anyway, the thing that really stuck in my craw is that they're being paid several times over and above the going rate for electricity (probably subsidized by a federal grant) and they're still whining that they're not being given enough breaks.

    If Solar energy can't make it on a truly level playing field, then it's not yet ready for prime time. Research is great, but don't pretend like this "Solar Plant" is a viable contributor to the energy system because it's not. And the fact that the endeavor can't even make money given the huge advantages they're given over the traditional power industry is the proof in the pudding.

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