Loss of tax abatement could derail a massive solar project in Indiana

A project larger than Indiana’s entire installed solar capacity so far is currently in development purgatory after a requested tax abatement by developer Invenergy was shot down by the Madison County Council.

The Lone Oak Solar Energy Center was set to be a $110 million, 120 MW solar project located on 850 continuous acres in Madison County. Now, without the tax abatement Invenergy has shared that the project may just be economically unviable.

The project was planned to have a 35-year lifespan, over the course of which Invenergy would pay a reported $24.2 million in additional taxes, outside of what was asked for under the abatement.

This could prove to be a huge blow to the Indiana solar market, as the project’s capacity represents nearly half of the state’s current total installed capacity of just over 350 MW. It’s not the largest project planned for the Hoosier State, as Ranger Power, based out of Brooklyn, New York is developing the 199 MW Speedway Solar Project in Shelby County.

According to the MISO interconnection queue, there are 5.7 GW of projects 199 MW or larger planned for Indiana by the end of October 2023. If you’re thinking to yourself that that’s absolutely astronomical predicted development, you should know that figure excludes any project on the queue under 199 MW. Now when all proposed interconnection projects are considered, that number jumps to nearly 8.6 GW, for a state that, once again, has 331 MW to its name so far.

Now that number is destined only to fall, as plenty of projects in any interconnection queue never get built. However, if we use ISO New England’s figure that an estimated 30% of projects with interconnection agreements see finalization, we’re still looking at 2.6 GW, nearly eight times more than the current installed capacity, over a 4-year span. And, one last thing, these figures do not include the portions if Indiana that are part of the PJM Interconnection grid, nor any distributed solar.

So what we have on our hands here is a case of mixed news. It’s disheartening both that a project of this scale looks likely to be dead, yet there are plenty of projects on the horizon in Indiana, with tons larger in scope than the Lone Oak Solar Energy Center, and it is highly unlikely that we will see some kind of project cancellation domino effect.

Besides, Lone Oak’s death certificate has not yet been signed, so there’s hope and we’ve seen Indianans overcome great odds before.