HARVARD -- After lengthy discussion, advice from regional assessor Harald Scheid and input from state Sen. James Eldridge, selectmen Tuesday night decided to take no action on a request from the Harvard Solar Garden to adopt a proposed PILOT (payment in lieu of taxes) program that promised payment to the town totaling 4 percent of the electricity produced by Solar Garden I, now under construction on Ayer Road.
Proponents sketched the creation of the new facility as part of a great notion whose time has come, based on the premise that solar power is good for the town and for the world.
HSG started out as a group of residents who for various reasons did not fit the profile for home-based installations under the Solarize Massachusetts program many others in town signed up for. But the group still wanted in, so they formed a partnership to build a solar farm. The set-up features shared ownership and energy credit paybacks to shareholders once the facility is online, rather than direct solar power delivered to their homes.
Comparing the project to a community garden or condo association, HSG members at the recent meeting said the PILOT proposal they were asking the board to consider would swap traditional taxation for payments the town could count on as a revenue stream.
What's in it for Harvard?
It took some time to find a suitable site and work through the permit process, but when HSG spread its buy-in net outside town borders, some residents and town officials saw that as a moneymaking proposition rather than a grass-roots effort with town benefits,
But according to HSG, the marketing move was prompted by economies of scale and shareholder benefits would come not from dividends but from energy credits derived from selling Solar Farm-generated power to National Grid.
Stressing the local angle, Worth Robbins and other group members said that only shares owned by Harvard residents would be tax exempt if the measure is approved.
Now comes another bump on the rocky road. At the recent meeting, Sheid told selectmen that the Department of Revenue, which had previously been "quiet" on PILOT programs, has weighed in on the issue.
At an assessor's meeting last week, members discussed DOR's interpretation of state law regarding PILOT exemptions, Sheid said, which is that any taxable solar facility in a Massachusetts municipality is subject to assessment, with an attached value that adds to the "new growth" revenue stream.
The DOR pronouncement adds "a level of complication" to the scenario, he said.
Of concern is that the PILOT payment would be based on actual generated electricity, Sheid said, but that measure might be "too variable" to translate it to a "valuation equivalent." The town's goal should be to establish a "fixed revenue stream," he said.
"What's being taxed?" Selectman Leo Blair asked.
Sheid said the land would be taxed as real estate and equipment as personal property. "So there's a valuation prescription, income-based," he concluded.
Interestingly, he said that if the property owner were building the solar facility instead of the HSG as renters it would be tax exempt.
As it is, HSG has a citizen's petition on the annual Town Meeting warrant asking for authorization to file a home-rule petition with the state legislature seeking tax-exempt status.
If selectmen approve the PILOT proposal, they'd have to go back to Town Meeting for authorization, according to Town Administrator Tim Bragan.
But proponents said the PILOT promise would be kept whether or not their citizen's petition warrant article passes muster at the April 1 Town Meeting and they subsequently get the tax exemption.
Selectman Lucy Wallace said that was "generous" of the HSG, but she wondered if four percent was enough. "Given the town's revenue needs, I want to be sure it's fair on both sides," she said. "Maybe six percent would be closer."
Scheid suggested a "discounted tax flow analysis" to see what the town's take would be.
In the end, the board decided to set the HSG's PILOT bid aside for now, since the DOR's new PILOT policy is being challenged.
"Let's wait and see" how the Appellate Taxation Board rules, Wallace said.
The board agreed, voting unanimously for Blair's motion to "take no action."