Solar Leases Mean Michigan Farmers Could Lose Tax Incentives
According to the Midwest Energy News and the Huron Daily Tribune, state officials recently warned that farmers will have to decide between getting state tax credits under the Michigan Department of Agriculture and Rural Development's Farmland and Open Space Preservation Program (Public Act 116), or leasing their property to solar developers. Property owners cannot do both.
The Farmland Preservation Program is designed so that property owners receive a tax credit in bad farming years but may not receive any during a good crop year. Rich Harlow, Michigan's Farmland Preservation Program manager, has stated that farmers would no longer be eligible for these tax credits if they sign a solar contract. Furthermore, if the property owner takes their land out of the Program to make it into a solar farm, they would be required to pay back the previous seven years of income tax breaks or face a lien on their property. The land for the solar farm would also have to be rezoned to commercial or industrial to accommodate that use.
Several land owners in Huron County have reportedly been contacted by Cypress Creek Renewable about leasing land for solar development. Harlow recently stated, “Huron County is one of the major participants in the farmland and open space program through these restrictive covenants…we haven’t seen any plans for these (solar) facilities, though there have been a number of calls about land that’s in this program. What we do know is that (solar development) is not considered to be agricultural use — they’re not growing a crop.” The state currently has 3.3 million acres of farmland enrolled in PA 116.
Unlike wind turbines, which have minimal footprints, solar projects could block tens of acres of harvestable land and are therefore not “farmland preservation,” according to the state.