Solar Land Auction Nets $2.6M: More to Come

Vermaland, an Arizona land developer with 1,938 acres of land it says is prime real estate for PV farms, auctioned off 400 acres of the total for $2.6 million.

One parcel, which consists of 80 acres in the Tonopah-Harquahala area south of Phoenix, sold for $340,000, at $4,250 per acre while another 320-acre parcel in Tonopah sold for $2.24 million at auction, or brought $7,100 per acre.  The sale of both properties came to nearly $2.6 million. The remaining land, along with other land owned by the company, continues to be investigated by other potential buyers, according to a spokeswoman.

Arizona has been trying to promote solar in its borders with credits and incentives for manufacturers and consumers. Arizona Public Service has a mandate to provide 4.5 percent of its power from renewable sources by 2014. The state offers a $3 per watt credit, nearly twice as high as California's. Baseline power in the state, however, is comparatively cheap so some of the advantage is eroded. Nonetheless, some power providers want to produce power in Arizona to sell to California.

One of the state's chief assets, of course, is the sun and empty land. Sempra Generation, an independent power provider, has said it will build more than 300 megawatts of PV parks on 4,000 acres it owns near Phoenix. Land was part of the motivation behind First Solar's purchase of Optisolar. First Solar is discarding Optisolar's technology but keeping the deals and land rights.

Now, the downside. There is no guarantee that states like Arizona will continue their solar incentive programs. Transmission lines need to be laid down to connect many remote areas and the Bureau of Land Management has started an investigation into the First Solar deal. The BLM apparently fears speculation fever.

Either way, expect to see a lot more interest in wide open spaces over the next two decades.