‘Power Purchase Agreement’ would pass on some benefits of federal tax credits to city

Belfast approves deal to install solar panels on fire station

Tue, 10/14/2014 - 8:45am

    BELFAST – Last week, the City Council approved a deal with ReVision Energy to install a 180-panel, 45.9 kilowatt solar energy system on the roof of the Belfast Fire Station. According to projections by ReVision Energy the city would save money over the life of the system. It would also almost certainly use less electricity generated from fossil fuels. 

    City Councilor Eric Sanders’ response was: “Why in the hell didn’t we do this five years ago?”

    The answer was not for lack of foresight. Solar panels were much more expensive five years ago, and the federal tax incentives that have made new solar energy installations appealing for businesses and homeowners haven’t applied to entities like cities and towns that don’t pay taxes.

    ReVision Energy approached the city last fall with a workaround called a Power Purchase Agreement. In broad strokes, the city would allow ReVision Energy to install the $150,000 solar electric system on the roof of the fire station at its own expense and agree to buy the electricity generated there for six years — the term during which federal tax credits apply.

    ReVision would benefit from the tax credits, and pass on a two-cent-per-kilowatt-hour discount to the city based on Central Maine Power’s small general service rates.

    At the end of the six years, the city would have the option to buy the solar power system at market value and use it to offset its own electric bill and fossil fuel use for the rest of the system’s projected 20-25 year lifespan. 

    On balance, the city would gain some small savings in the short term and potentially some significant savings in the long term. During the six years, the city could potentially sock away money to pay for the buyout. The city could also continue under the terms of the Power Purchase Agreement. By this route, ReVision estimates the city would save a total of $135,000 over 20 years, compared with projected CMP rates.

    Program manager Sam Lavallee said ReVision Energy has been using this type of third-party Power Purchase Agreement since 2011 and has done projects with “several dozen” municipalities in Maine and New Hampshire.

    He said ReVision is looking at the fire station as first phase, adding that the company has held “preliminary conversations” with city officials about installing solar arrays on other municipal buildings in the future.

    The Council authorized the city manager to finalize the contract with ReVision Energy pending review of the Interconnection Agreement and Power Purchase Agreement with the city attorney. City Manager Joe Slocum said he hopes to see the solar array installed before winter.

    Several City Councilors said they were more receptive to the novel agreement because it came from a local company with a long work history in the area. ReVision Energy was founded in 2004 and has offices in Liberty, Portland and Exeter, NH.

    In other business, the Council:

    • Accepted with regret the resignation of Children’s Librarian Jane Thompson and RSU 20 board member Jason Perkins; confirmed Mike Sealy as a new member of the Belfast Ambulance in the capacity Paramedic Per Diem, to be called in when needed.

    • Appointed Theresa Butler as Deputy Treasurer of the City of Belfast.

    • Approved the purchase of a John Deere motor grader from NorTrax of Hermon for $228,000. Funding would come from two Public Works accounts. The Council also approved spending up to $9,000 to update the underground pump station at the Belfast Transfer Station to a safer, more modern system.

    • Approved a request from the Parks and Recreation Department to install kayak racks at City Park and charge an annual rental fee of $40.

    • Approved amendments to the boundaries and permitted activities in most of the zoning districts inside the bypass. Amendments to the Downtown Commercial district were given a first reading due to late recommendations to change the maximum building height in three areas of this district and make changes to the boundaries of two of these areas. Definitions of Accessory Apartment to Single Family Residence, Formula Restaurant and Lot Coverage were given first readings based on revisions, as was a change in the maximum height of the Waldo County General Hospital building.

    • Held two executive sessions on real estate matters but took no action.

    Ethan Andrews can be reached at news@penbaypilot.com