Visit to Plant

Green Venture Projects 14.7MW Solar Plant, Regional Contribution (page 3)

2014/03/25 13:42
Kenji Kaneko, Nikkei BP CleanTech Institute
Print Page

The site of Suigo Itako Solar was a 24.5-hectare piece of idle land dubbed "Roadside Station Itako periphery," the effective use of which had been continuously discussed for over 20 years since the city started taking over farmland. In 1987, the land was originally planned to be a sightseeing farm, in which the farm was rented for earning fees with the aim of combining the set-aside policy and local development.

Following some later changes in the plan, the Itako Suigo Rakuen Framework was established and development was permitted; however, the mayor changed and the project was frozen partly because of the significant impact on municipal finances from the huge project cost of ¥5.2 billion.

In 1998, the Roadside Station Establishment Framework was planned, and construction started targeting about 2 hectares of the site. The city has continued to increase the size of the land and establish other parts of the area with a view to attracting industrial plants. However, as production increasingly shifted overseas, the city could not attract plants as it had expected.

Itako City had thus far invested approximately ¥2.5 billion into Roadside Station Itako periphery for land acquisition, design commissions, building an embankment, etc. Moreover, it cost Itako City ¥6 million every year for weeding and renting the private property that could not be then acquired.

Approx ¥1.1 billion income for Itako City over next 20 years

Since the feed-in tariff (FIT) program for reusable energy was implemented in July 2012, Itako City has had inquiries about the Roadside Station Itako periphery as a location for a mega-solar power plant and proposed business projects by numerous enterprises. Considering the sum of money it had invested thus far, Itako City wished to place its hope in the attraction of manufacturing plants, which would have a significant employment effect. But it could not keep up with the maintenance costs. As a result, the city made the tough decision to build the mega-solar power plant.

Although the solar power plant does not have the same employment effect as an industrial plant would, Itako City can expect about ¥1.1 billion income from the operation of Suigo Itako Solar over the next 20 years. The breakdown is rent for the land of about ¥676 million, an estimated fixed asset tax of ¥300 million and an estimated municipal corporate inhabitants’ tax of ¥140 million.

Itako City initially announced the annual rent for the land was more than ¥180 per 1m2, but it finally reached ¥250 per 1m2 when the contract was signed. In addition, the yearly maintenance cost of ¥6 million is no longer required. Yet, the amount still falls short of the ¥2.5 billion that has thus far been invested. Kiminami pushed forward "regional contribution" based on these circumstances.

(Continue to the next page)