Frequently Asked Questions
Learn More About Red-tailed Hawk Solar
Red-tailed Hawk Solar is a 350 megawatt large-scale solar Project planned on a 3,000-acre tract of the Pierce Ranch east of El Campo in Wharton County, Texas.
Through an equally owned joint venture company – AP Solar Holdings LLC – Solar Plus Development Inc. and Avondale Solar LLC will develop this state-of-the art project with J-POWER USA Development Co. Ltd., a leading competitive energy producer.
The solar Project is scheduled to break ground in the first quarter of 2021 and be fully operational by the summer of 2022. However, to ensure that the Project is financeable, it is critical that Wharton County Commissioners support Red-tailed Hawk Solar by providing a 312 tax abatement agreement. The financial model upon which this project has been structured takes into account a 10-year tax abatement, similar to other neighboring projects of this scope and scale. Importantly, nearly all advanced industrial-scale projects involve some degree of municipal tax incentives to help create a viable Return on Investment (ROI) and to bring a project to fruition. But the real ROI is what is returned to the municipality, which becomes the beneficiary of more jobs, more investment and more revenues to pay the bills.
With an estimated 1,000 people moving to Texas every day, demand on the state’s energy grid has never been greater. In fact, electricity production in the state has grown by five percent over the past five years – even as nationwide production has fallen. Fortunately, Texas sits in a geographic and climatic sweet spot, which allows it to cheaply and efficiently harness energy from many different sources, including renewables, to help meet increased demands on electricity. As the largest energy-producing and consuming state in the nation, Texas has done an extraordinary job of adopting a multi-source generation approach to supply power to its rapidly expanding economy. Solar power is key to that approach.
When operational, Red-tailed Hawk Solar will provide enough low-cost electricity to power about 65,000 Texas homes.
As part of a larger energy diversification program, oil and gas companies are also investing heavily in solar projects. ExxonMobil, for example, plans to meet 70 percent of its Texas power demand with renewables through 12-year purchase agreements, including a purchase agreement with a 250 MW solar project coming online next year in the Permian Basin.
By diversifying its energy portfolio to include solar – one of the cleanest, most abundant, reliable and low-cost energy sources in the world – Texas is addressing the peak demand stress on the state’s power grid.
The economic benefits of Red-tailed Hawk Solar to Wharton County are substantial, totaling more than $1.4 million during the construction phase, $13 million in total county tax revenues over a 10-year period, and $31 million in total county tax revenues over a 30-year period. These revenues will support Wharton County hospitals, first responders and other essential community services.
Like other parts of the state and nation, Wharton County’s tax base has been adversely affected by the ongoing COVID-19 pandemic. Existing and proposed solar projects, such as Red-tailed Hawk Solar, provide benefits to the broader economy by helping to offset some of those losses, including keeping energy costs affordable and reliable for Texas homes and businesses.
Yes, the Wharton Independent School District (ISD) greatly benefits as well; the Chapter 313 agreement that the ISD has already granted the Project will add about $7 million during the construction period and year one and exceed $16 million over the 10-year agreement period. The total 30-year tax revenues will be more than $38 million to Wharton ISD.
These new monies are particularly important now. In Texas, royalties from the state’s oil and natural industry are deposited in the Permanent University Fund and Permanent School Fund, which support public education in the state. Currently, Wharton ISD receives very little in oil and gas royalties. The County also receives only a small fraction of the oil and gas tax revenues that it did 10 years ago. Red-tailed Hawk Solar will help bridge some of these gaps by providing much-needed revenue to a presently under-funded education system.
In neighboring Gregory County, where two solar projects have been developed, the school district has been the primary beneficiary, receiving a significant amount in additional funding. Red-tailed Hawk Solar can provide similar benefits to the Wharton ISD.
In addition to the tax revenues, the County will benefit from the more than 300 jobs that will be created during the two-year construction period. This generates sales tax receipts on building materials, as well as indirect revenues derived for the hotel and food service industries. During operation, Red-tailed Hawk Solar will sustain three full-time positions.
During the pandemic, more than 200,000 national employees in the solar industry – 10,000 in Texas alone – have been declared “essential critical infrastructure workers,” as they help ensure that America’s growing energy demands continue to be met. These jobs help to counteract so many others that have been lost during the pandemic.
The Project is situated on the Pierce Ranch, which has been owned and managed by the Armour family since 1886, sits on 32,000 acres in Wharton County. The Armours are dedicated stewards of the land, with the keen intent of keeping the land intact and utilizing safe, environmentally friendly and community-conscious uses, including agriculture, irrigation, hunting, crawfishing and clean, renewable energy production. Once the solar plant is retired in approximately 30 years, the land can be converted back to agricultural use. In the meantime, no producer on Pierce Ranch has lost or will lose his traditional share of productive farmland acreage as a result of Red-tailed Hawk Solar.
Because solar power is one of the lowest-cost forms of electricity to produce in Texas – a much lower cost compared to natural gas- and coal-fired power generation – and because our input resource is free and abundant (the sun!), AP Solar does not envision any scenario under which Red-tailed Hawk Solar would go out of business at any point over its projected 30-year lifetime.
Insurance policies will be in place to cover catastrophic events.
Given the extreme timelines it typically takes for any given type of power generation technology to become obsolete – i.e., over many decades – it is unlikely that solar power would become obsolete during the projected 30-year project life. In the unlikely event that solar power becomes obsolete during the 30-year project life, then AP Solar would have the ability to re-power the existing solar field with the latest technology available, thereby increasing value to the property tax base as a result.
The lease requires the Project owner to return the land to the pre-construction condition. A closure bond will be established to facilitate reconstruction and site cleanup.
Red-tailed Hawk Solar will sell its electricity output directly to the ERCOT grid and will receive fixed price payments for its electricity under a long-term contract with a creditworthy buyer, creating a long-term revenue stream for the Project and preserving the Project’s long-term economic viability.
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