Despite boasting one of the nation's sunniest climates, despite laboring under towering electricity rates, San Diego County isn't home to a single solar energy plant. It's not that we haven't tried. A 20-acre solar farm in Warner Springs produced a small amount of power in the early '80s before it closed in 1985. Also in the '80s, a company called United Energy Corporation, headquartered in Foster City, California, built a solar power plant in Borrego Springs. Forty-five million dollars went into the 178-acre project, which was in operation from 1981 to 1984. But it never put any power onto the grid.
"Not one watt," says Stuart Resor, the 59-year-old Cardiff architect who owns 67 acres of the former solar plant. As he steers his Toyota van eastward down the sandy road that forms the southern border of his property, he paints, with words and gestures, a picture of what once stood on this bleak patch of desert. "All of this to the left and right were solar ponds. My property, which extends a half mile to the left, had 16 of these solar ponds. If you look closely, you can still see the circles in the ground. They're about 200 feet in diameter. You might see a pipe sticking up out of the ground. That would be the center pivot right in the middle of the pond. It was a pretty clever idea -- to float the solar collectors on these shallow ponds so that the collectors could be rotated to follow the sun every day."
Stuart stops the van at the gate of a 10-foot chain-link fence topped with an out-leaning barbed-wire extension. Within the fenced four acres stands a 40-foot-high, 100-foot-long jungle of fiberglass and steel tanks and piping, all painted white. "This is the old ethanol still," Resor explains. "They used hot water from the solar panels to boil molasses in the tanks and make the ethanol, which is used as a gasoline additive."
The fact that the still stands today, while scattered plastic lenses and electrical meters are all that remain of the solar collectors, is a testament to one of the major reasons why the Borrego solar experiment failed. "I think they were trying to do too much too fast," says Charlie Hale, an engineer who worked on the solar farm. "They wanted to build as many solar ponds as they could as fast as they could. Then they started the ethanol production. Then they started talking about using the ponds to grow algae that could be used as a livestock feed supplement. Then it was raising fish in the ponds. There was even talk about having a dairy farm on the site, with the cows walking around among the solar panels. It was too much." Hale worked on the solar farm for the three years it was in operation, plus the following three years, when an attempt was made to turn it into a fish farm raising tilapia for sushi restaurants. "If I had been in charge," he says, "I would have built two, maybe three ponds. And when those were working perfectly and were putting power onto the grid, then I would have started building more. But Ernie and the other people running UEC, they wanted it to be big fast."
In the effort to be big fast, United Energy Corporation owner Ernest Lambert -- the "Ernie" Hale refers to -- erected solar collectors on 12 ponds right away. They all had the same fault. "They didn't account for the wind," Hale recalls, "when they built the first set of solar collectors, the first time the wind came blowing through there -- with 80-, 90-mile-per-hour gusts -- it tore them apart."
Yet Lambert plowed ahead, fueled by millions of dollars pumped into the company by investors. The reason investors were so eager? "Tax credits," says investment broker Ed Ravenscroft of Morgan Hill in Northern California. "At the time -- it was just after the oil embargoes and the gas lines and all of that -- Congress had just passed legislation to encourage alternative energy: windmills, solar energy, etcetera. And this was a project that provided full tax credits equal to their investments. Instead of giving money to the IRS, investors could put it into programs that involved alternative energy."
It seemed a perfect situation; Congress was happy to have alternative energy funded without having to do it themselves; investors were happy to put their would-be tax dollars into an alternative-power project, which had the possibility of returning on their investments; and United Energy Corporation was happy to have the funding to put its solar energy ideas into practice. There were no losers in the deal -- except the Internal Revenue Service, whom Ravenscroft blames for the failure of the Borrego solar farm. "The IRS attacked it and disallowed all the tax credits. That's why it failed, because the IRS destroyed the manufacturer and disallowed investors' tax credits. My investors didn't lose because I fought the IRS for five years. The other people, about two thirds of the money or so, went along and settled with a trustee under the court. This trustee basically wanted to put the company out of business, and he worked with the IRS to get the thing destroyed. He made a lot of money, and the IRS destroyed a lot of people. But we fought them, and we were fortunate enough to get a different type of settlement than everybody else got. My people, they lost their investment, but, because they didn't lose their tax credit, they didn't lose."
The Internal Revenue Service alleged that the solar technology United Energy Corporation was advertising to its clients as ready to produce power was little more than experimental. "The problem was," Ravenscroft explains, "at the beginning, the equipment wasn't capable of producing the type of income the manufacturer was projecting it would. There were three different generations of equipment. The first was basically research and development, but the manufacturer didn't treat it like R&D; he treated it like an income program. And the IRS basically said, 'Well, it doesn't work.' Had [Lambert] labeled it as R&D in the first place, he might have gotten off a lot better. As it was, the IRS said it was overpriced. Therefore, they disallowed the credits. But the third-generation collector was a pretty good piece of equipment. Had they been allowed to retrofit everything [with the third-generation collectors], I think in the long run it might have worked out."
Even under the watch of the Internal Revenue Service, the solar farm could have succeeded, Ravenscroft believes, but for the hubris of Ernest Lambert, who decided to sue the IRS instead of work with them. "The owner [Lambert] dug his heels in and took a position he probably shouldn't have done. I don't know if he could have worked with the IRS, but he possibly could have worked around the courts and a few other things that could have possibly solved it. But he was headstrong enough to think he could win on the concept of what he was trying to do."
"What happened was," Ravenscroft continues, "in December of 1984, the IRS issued illegal public announcements in newspapers up and down California that UEC was under investigation and that they were going to disallow the credits and everything else. Well, until it goes through a court case, you can't do that; the IRS didn't have the authority to do that. What that did was trigger public opinion against the company. And people who had investments pending started saying, 'I want all my money back.' So the people who made investments in 1984 had to be refunded at the end of the year. This forced the company to lose $20 to $30 million worth of business. It caused me to lose $6 million worth of business. This forced the company into Chapter 11 bankruptcy. Under that Chapter 11, they were trying to reorganize the company. The bankruptcy court made [Lambert] debtor in possession, and as debtor in possession, you can reorganize your whole company. He had $6 million of debt and $100 million of accounts receivable under the contracts for the equipment, which were long-term contracts. So he started taking that income and retrofitting the equipment. What happened then is, one of the creditors went to the court and convinced them that maybe we ought to have a trustee in charge instead of a debtor in possession. Well, the trustee came in -- I think it was a set-up deal, personally; I think he had met with the IRS before -- and went out there to liquidate the company. He made a settlement with the IRS in which he agreed to discontinue the lawsuits against the IRS, and that was the end of the project."
After the solar farm died, Ravenscroft, trying to make something out of the project and generate a return for his investors, bought the land and tried to develop the tilapia farm. "I worked with some people from the University of Arizona on it. We were trying to save the project for as many investors as possible by turning it into an income-producing fish farm. But we didn't have the capital to do everything we needed to do, and it just kind of failed."
A little over a year ago, Ravenscroft let the property go into foreclosure. The Bank of Stockton took over ownership and sold 67 acres to Stuart Resor in June 2000 for $400 an acre. Since then, Resor has gone about the task of cleaning the place up in preparation for its next life as a recreational vehicle park and tent campground. He has bought a single-wide mobile home, which will become a caretaker's residence. And with the help of a team of local laborers and contractors, Resor has removed ten 45-foot Dumpsters of brush and debris, improved the road, stripped the old lab building down to the studs -- it will become a museum someday -- repaired fencing, and gathered thousands of blocks of Styrofoam that once buoyed solar collectors. "I was able to give away most of that," Resor said. "One guy was insulating an airplane hangar with it."
A year and $100,000 into the project, Resor, who has been camping in Borrego for over 30 years, says he's surprised at how slow and expensive the project has been. "I'll have over $200,000 invested in it by the time I have any campers out here. First, I'm going to get the caretaker's residence buffed out. Then I'm going to start looking for investors, and I'm going to start building the campground. I'd say it will be three years to get all the permits from the county, which will cost anywhere from $2000 to $10,000."