A proposal to build one of the world's largest solar farms south of Silicon Valley took a major step forward this week when a state appeals court rejected a lawsuit by environmental groups who have tried to stop it on the grounds it could harm endangered species.

The project, a $1.8 billion, 399-megawatt solar farm, is proposed for Panoche Valley, an arid expanse of rangeland and barbed wire 50 miles southeast of Hollister. If built, it would cover an area the size of about 3,000 football fields with photovoltaic panels and provide enough electricity for more than 100,000 homes.

"We're pleased with the court's decision," said John Pimentel, president of PV2 Energy, a San Francisco firm partnering with Duke Energy to develop the solar farm. "We've been working hard to build a project that is good for the environment and good for the community."

Pimentel said he hopes to break ground on the project by the end of 2014. However, environmentalists who oppose the project say they plan to keep fighting.

"Obviously we're disappointed," said Shani Kleinhaus, environmental advocate for the Santa Clara Valley Audubon Society, one of the groups that sued. "We feel the court didn't really understand the importance of the valley for endangered species in California."


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In 2010, the San Benito County Board of Supervisors voted to approve the project, saying it would make the rustic county -- known more for its cattle and condors than solar panels -- a national center of clean energy.

But the Santa Clara Valley Audubon Society, the Sierra Club and a local group called Save Panoche Valley sued to block it, arguing that the 4 million solar panels that would be constructed across the roughly 3,000 acres west of Interstate 5 would harm disrupt the rural character of the area, and harm endangered species such as the San Joaquin kit fox, blunt-nosed leopard lizard and giant kangaroo rat.

The environmental groups lost the first round in 2011. Then a San Benito County court rejected their arguments that county supervisors who approved the project had violated the California Environmental Quality Act and the Williamson Act, a state law that preserves ranchland by blocking development in exchange for lowering ranchers' taxes. The court noted that the developers agreed to buy 23,000 adjacent acres -- an area of cattle grazing land seven times the size of the area the solar panels would take up -- and place them in permanent conservation easements as a way to offset the effects from the project.

The environmental groups appealed. But in a ruling filed Tuesday, the San Jose-based Sixth District Court of Appeal agreed with the lower court. The court's three-judge panel noted that although the environmentalists said the county should have considered other locations, such as property owned by Westlands Water District contaminated with selenium, a site that was 60 miles away in Fresno and Kings counties -- but the developers had attempted to do a deal there but couldn't come to an agreement on land prices.

In the opinion, written by Justice Eugene Primo, the court also turned down environmentalists' assertions that the adjacent lands the developers would be setting aside for endangered species wasn't good enough habitat because surveys have shown it already has giant kangaroo rats, San Joaquin kit foxes and blunt-nosed leopard lizards living on it.

Before the project can be built, it still must clear several more hurdles. Most important, company officials need to secure an agreement with Pacific Gas & Electric or another utility to buy the electricity it generates. Second, it must obtain permits from the U.S. Fish and Wildlife Service and the state Department of Fish and Wildlife, which may require more study of the effects on endangered species.

"This is a setback, but it is not the end of the road," said Kleinhaus of the Audubon Society.

She noted that her Audubon chapter, the Sierra Club, the Center for Biological Diversity and other groups have written letters to utility companies urging them not to sign deals to buy the solar power because of the project's effects on endangered species.

Kleinhaus said she is not opposed to all large solar power projects, but she prefers smaller rooftop arrays on individual buildings, which have less effect on wildlife than large projects.

In recent years, California Gov. Jerry Brown and President Barack Obama have pushed for construction of large solar projects, saying they are vital to reduce greenhouse gas emissions that cause global warming. But some environmental groups have sued over large proposals, particularly in the Mojave Desert, where species such as bighorn sheep, desert tortoises and others live.

Several of the projects have failed because of delays, lawsuits, cost overruns and problems getting permits. Others are moving ahead.

Most notably, the $2 billion Ivanpah solar project, developed by BrightSource Energy in Oakland, is 95 percent complete. Located on the California-Nevada border 50 miles from Needles, it will supply solar power to 140,000 homes.

Paul Rogers covers resources and environmental issues. Contact him at 408-920-5045. Follow him at Twitter.com/PaulRogersSJMN.