Farrell explained that his company represents investors seeking to take
advantage of state and federal tax credits for net metered alternative
energy systems. The business model he is proposing is one where towns
provide the land and Encore Redevelopment handles the system
installation, operation and maintenance for at least 10 years. During
those 10 years the town signs an agreement to purchase the power from
that solar array for 10 percent below market rate.
750 FIXED PANELS
At the end of 10 years, the town would have the option of signing
another agreement to continue buying the power, or to purchase the solar
installation for approximately $200,000. The system would include fixed
panels, as opposed to trackers. To generate 150kW of power would
require 750 fixed photovoltaic panels, which require about 1.5 acres of
land.
Neither Farrell nor members of the select board identified any piece of
town property as a possible site, although the town garage at the top of
Tremblay Road was discussed as being suitable for the a project because
of its solar exposure and proximity to the pre-existing electrical
grid.
Time is of the essence for this and any project in Vermont, the select
board and others were told, because the tax credits that make these
types of projects attractive to investors expire at the end of the year
and all systems must be fully operational and come on line before the
end of the year. In addition to the tax credit deadline there is also a
Vermont Public Service Board deadline of July 15 for applications for
these projects to be submitted.
YEA OR NAY BY JUNE 1
For Encore Redevelopment to apply to the Public Service Board for a
Certificate of Public Good by July 15, the company needs a yea or nay
from the town by the beginning of June in order to complete a
feasibility study on whatever parcel of land might be chosen for the
project.
The process for public review of such systems takes place at the state
level, only before the Public Service Board, which will notify abutters
and take public comment for 30 days and issue a decision within 45 days.
Such projects are exempt from local review by state statute.
At the May 10 special meeting, select board members peppered Farrell
with questions as did representatives of the town's budget task force,
the town's energy commission, the town's conservation commission and
planning commission and members of the public.
Dennis Derryberry, Waitsfield's current energy coordinator, explained
that the town currently uses about 161,000 kilowatt hours (excluding the
town offices but including the school, Wait House, fire station and
town garage). He said that the town pays approximately $22,000 per year
for that electricity.
DEPRECIATE THEIR INVESTMENT
Farrell said that a 150kW system would generate 161,000 kilowatt hours
per year and that any overage the system generated would yield a
dividend for the owners, whether it is group of investors or the town.
The photovoltaic array would produce approximately 161 kW per year and
generate $40,000 a year for the investors by selling the energy produced
to Green Mountain Power at today's market rates. He said that the
investors would fully depreciate their investment over five years.
According to Farrell 10 years of saving 10 percent on electricity at
today's rates would save the town $22,000 in costs. Purchasing the
system for approximately $200,000 at the end of the lease term would
mean that the town's electricity would be free (a savings of $22,000 a
year at today's rates) and he suggested the town could pay off the
system in four years, based on projected energy costs in 2020.
Robin Morris, a member of the town budgeting committee, asked Farrell if
the community must purchase the system at the end of the 10-year power
purchase agreement and Farrell explained that under the terms of the
power purchase agreement the town would either have to purchase the
system or extend the lease for another 10 years.
Leo Laferriere, from the Conservation Commission, asked if Encore
Redevelopment is the only company doing these types of projects in
Vermont and Farrell said there were other renewable energy corporations
seeking the same types of partnerships for these community models in
Vermont.
OPERATING COSTS?
In response to a select board question about where such systems
currently exist in Vermont, Farrell said there are none on line in
Vermont yet, but this type of community model has been heavily vetted in
California. Select board chair Kate Williams asked whether new solar
panel technology would make the proposed system obsolete or inefficient
over its design life of 30 years. Farrell said that the panels
themselves were guaranteed for 25 years and after that could be expected
to lose about half of 1 percent of productivity each year thereafter.
Town Administrator Valerie Capels asked Farrell about the costs of
operating the system for the town should the town purchase the system
after the 10-year power purchase agreement expired. Farrell said there
were no costs to the town (other than providing the land) during the
first 10 years, only the benefit of paying 90 percent of market rates
for electricity.
Should the town purchase the system, he said, the town would need to pay
for an operator, general maintenance and the bookkeeping associated
with selling and using the power. For the town to make such a purchase
would be considered a capital expense and such an expense would need to
come before voters during the regular budgetary process of Town Meeting.
The select board will discuss the proposal again on May 17 at 6:30 p.m.
at its next regularly scheduled meeting and will discuss specifics of a
location for such a project, including the town garage lands. That
meeting is at the Town Offices and is open to the public.
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