Fed Fees for Solar on Public Land Draw Criticism

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arizona Fed Fees for Solar on Public Land Draw Criticism On June 10, the United States Bureau of Land Management (BLM) sent a letter concerning the fees the federal government will chargesolar companies to develop projects on public land. Now, it seems, Uncle Sam is Under Fire.

The Bureau’s letter outlined something called the “megawatt capacityfee” — a charge levied above and beyond standard land-use leasepayments. We’ll let the BLM have the first crack at laying out the cost:

Photovoltaic (PV): The MW capacity feeis $5,256 per year, calculated as (authorized capacityon public land in MWs) x (8,760 hours per year) x (20 percent capacityfactor) x (5.0 percent Federal bond yield) x ($0.06 average price perkilowatt hour) x (1,000 kilowatts per MW) = $5,256 per year for each MWof capacity.

Concentrated PV and concentrated solar power without storage: The MW capacity fee is $6,570 per year,calculated as (authorized capacity on public land in MWs) x (8,760 hours per year) x (25 percent capacity factor) x (5.0 percent Federal bondyield) x ($0.06 average price per kilowatt hour) x (1,000 kilowatts perMW) = $6,570 per year for each MW of capacity.

Concentrated solar power with storage capacity of 3hours or more: The MW capacity fee is $7,884 per year, calculatedas(authorized capacity on public land in MWs) x (8,760 hours per year) x (30 percent capacity factor) x (5.0 percent Federal bond yield) x($0.06 average price per kilowatt hour) x (1,000 kilowatts per MW) =$7,884 per year for each MW of capacity.

As you probably noticed, the megawatt capacity fee varies depending on the type of solar energy technology. This tiered structure has setthe Bureau up to receive the classic critique that government shouldn’tuse policy to “pick winners.” Popular Science says, in other words, thefees are creating a “disincentive” for companies to deploy morecost-effective solar technologies (solar thermal systems are, on a perkilowatt-hour basis, generally cheaper relative to solar PVinstallations).

What’s more, with the newly announced megawatt-capacity fee thegovernment may be charging too much. Via Todd Woody of the New York Times:

“The proposed B.L.M. rental fees are in many cases two times higher than market rates for private land,” Monique Hanis, a spokeswoman forthe Solar Energy Industries Association, said in an e-mail message.“The B.L.M. must collect ‘fair market value’ from developers, but thisseems to go beyond that threshold.”

Whether you agree or disagree with the charges being levied by theBLM, one thing to remember is that the program is called the SolarEnergy Interim Rental Policy. Whether the ongoingdebate may shift current policy is anyone’s guess.

So add your two cents and tell us: What do you think of the BLM’snew megawatt capacity fee?