Small towns are finding that solar is a great way to lower energy bills and reduce dependence on fossil fuels. It would seem that such a win-win situation would garner strong support from area residents, but even with the great progress made in solar technology, the solar industry still faces skeptics who challenge the wisdom of investing in solar. A case in point is a solar array that is in the planning stages in Peterborough, New Hampshire (US). At almost 950kW, it will be the largest solar array in the state of New Hampshire to date.
The complaints by a few serve as a reminder to solar professionals that part of their job is making the value proposition of solar power abundantly clear.
The town is expected to save between $24,000 and $57,000 a year (or up to $1.2 million over the 20-year contract). The total project will cost approximately $2.6 million, but thanks to a power purchase agreement with Water Street Solar (a subsidiary of Borrego Solar) and a $1.2 million grant from the NH Public Utilities Commission, the town will pay no upfront costs.
So what’s to complain about? From letters in the local paper, it seems that the public has plenty of complaints from the basic science of solar technology to the economic sense to the irradiation values in Peterborough, New Hampshire. While the majority of people may now be in favor of solar energy, the complaints by a few serve as a reminder to solar professionals that part of their job is making the value proposition of solar power abundantly clear.
Explaining solar installations in simple terms is no easy task, but it’s not impossible. Rodney Bartlett, Director of Public Works for the town of Peterborough, said that after applying and being turned down for the PUC grant in 2010, they spent a lot of time “figuring out how to make the package more attractive.” He said that Borrego did a great job on the project proposal submitted in June of 2013, which won the vote of 3 out of 4 members of the Executive Council.
The important point for tax payers to understand is that the installation won’t cost them a dime. The PUC grant will fund a portion, with Borrego Solar funding the rest through investors’ dollars. As Joe Harrison, Senior Project Developer and Project Lead explained, Borrego benefits over the long term because over the next 20 years, consumers of the electricity will pay Borrego for the electricity at the rate of 8¢/kWh. Consumers benefit because they are locking in an electricity rate at nearly a 60% reduction from the 13.9¢/kWh that they pay now.
And while 20 years is the length of the initial contract, the town has an option to extend it twice, each time by five additional years. The panels are warrantied for 25 years and 30 years is the anticipated productive system life.
The total project cost is estimated at $2.6 million and Borrego has determined that the cost of buying that energy from the utility would have cost $2.8 million based on utility prices going up about 4% a year. The grant brings the cost of the project down to $1.4 million and then there is a 30% federal tax credit on top of that, along with some depreciation savings. With those numbers alone this project becomes a good investment, according to Harrison.
Why the incentives?
Every type of energy receives tax breaks and incentives. “Natural gas and oil have significant tax loopholes and advantages for those companies that they’ve been enjoying for decades,” Harrison noted. And he said that solar is right on par with others in terms of incentives.
As the cost of solar drops (and the cost of other forms of energy rises) incentives won’t be necessary. Harrison said that in the six years that he’s been in this business he’s seen the cost per watt generated by solar drop 73%. “It’s working,” Harrison concluded.
The Peterborough plan
The location of the 947kW (DC) ground-mounted solar array is on a 3.5 acre former sewage lagoon. The unused lagoon has to be dredged and filled anyway, and the town has a grant to do so. With close proximity to power lines, connecting to the grid is expected to be straightforward. The town is planning to use 60% of the generated energy to power the wastewater treatment facility and the rest will be sent to the grid.
Through net metering the excess energy generated will show up as a credit on the town’s utility bill for the wastewater treatment plant, and those credits can be applied to other utility meters in the town.
The plan is to have the lagoon dredged and filled by October 2014, after which Borrego will come in and place a ballasted system on top. Connection to the grid is expected in the first quarter of 2015. Solar Novus Today will provide coverage of the installation as it happens and then follow up with the results after the plant has been operational as well as details on operations and maintenance.
Written by Anne Fischer, Managing Editor, Solar Novus Today