Wednesday, July 16, 2014

Proposed Cavendish Solar Power Project 7/14/14

The Cavendish Connects website now includes much of what was included on this blog as well as a calendar of Cavendish events. The new blog, “The Dish,” includes the Cavendish Update as well as on-going information.

At the July 7, 2014 Cavendish Select Board (SB) meeting, the Cavendish Energy Committee introduced the idea that there could be significant cost savings, as well as actual income, if the town developed its own solar system. The Committee started exploring this option when the preliminary contract with Soveren Solar,  the vendor selected in the fall to provide the town with a solar array, did not work out.

On Monday, July 14, members of the Energy Committee addressed aspects of the project at the monthly SB meeting. The proposed project would include a 150 kW solar photovoltaic system located south of the waste water treatment plant. The system would be net metered with Green Mountain Power (GMP).

1. Cash Flow
- In 2013, the cost of electricity from GMP for town services (Water & Sewer Departments, Transfer Station and Town Office) was $43,826.00.

- Floating a bond for $450,000, which would cover the cost of materials, installation, fencing etc., would require a yearly bond payment of $31,040 over 20 years. This is the one figure that remains constant in this project. Other yearly costs would include: State tax of $636 and Insurance & Maintenance (Year 1 would be $1,000 and would rise to $1,639 by Year 21). There is a 25-year warranty for the solar panels and a 10-year warranty for the inverters. A savings plan to help pay for replacements is included in the proposal.

- The utility bill savings in year one would be $35,859. Without accounting for inflation, by year 21 the savings would be $30,847. If a rate of  3.5% inflation were factored in to utility costs, considerably more would be accrued in savings so that by year 21, savings would be estimated to be $73,525.

- Since Cavendish already has the Certificate for Public Good, GMP would be required to pay the town .06¢ Solar Incentive for the next 10 years. This would begin when the system is installed. First year payment received would be $11,174.

- The combination of savings (utility bill savings + GMP Solar Incentive) minus costs (State tax, insurance & maintenance + bond payment) by the end of Year 1 would save the town $14,357. If annual inflation utility costs are factored in, by Year 21, the savings would increase to $71,250. If inflation is not a factor, the savings by Year 21, when the bond debt is paid off,  would be $28,572.

2. Solar Renewable Energy Certificates (SREC): Because the town would own the system, there would be an opportunity to sell Solar Renewable Energy Credits (SRECs) into the open market. These are credits that exist as the solar array produces power. Several states have created markets for these credits that Cavendish can sell into and realize cash in our pocket. 

Dan Sullivan, of the Energy Committee, spoke to the person who helps Black River Produce, which has several different solar arrays,  with the “sale” of their SREC. Sullivan reported that a 150 K system would produce 150 credits, which sell anywhere from $50 to $200 depending on the market. On average though, it is more like $60-$75 per credit. Using a more conservative estimate of around $9,000 per year for years 1-5, and slightly less for years 6 through 10, the SREC credit income would be set aside to help with the cost of Inverter Replacement. Basically, this approach would enable the town to maintain the system at no additional costs.

View from Route 131
Southern Exposure
3. Visual Impact: Located south of the waste water treatment plant, the array would not be visible from the highway and would barely be seen when driving up to the transfer station. The proposed area appears in photographs 1-3. 
View of Solar Site
 4. Concerns: Areas of concern raised by members of the audience, as well as by SB members,  included the following:
- What about snowstorms? Because the array is on a hillside, the snow will slide off. In the event of a very heavy snow with build up, the snow will be gone in less than 24 hours. Black River Produce reports that this has not been an issue for their hill mounted panels.

- Costs for cleaning: Issues of soot and smog that exist in other parts of the country are not a problem for our area. The care consists of cleaning the panels with soap and water twice a year, which was viewed as low maintenance by the town manager.

- Maintenance costs and responsibility: There was a concern that maintenance costs could be considerably higher than projected and a recommendation was made that one person in the town’s employee to be responsible for making sure the equipment is functioning properly. The Town manager indicated that there will be a computer program to help with this function. 

- Theft: Panel tracking, alarms and advanced, high technology security locks are now available at lower cost. Because of the replacement cost, insurance companies generally require certain security measures before issuing a policy.

- Are the numbers realistic? There are a number of variables that could impact the cost of the project, such as, reduction or elimination of incentives as solar becomes cheaper and used more frequently; higher maintenance cost etc. A request was made to provide more financial scenarios addressing other possible variables.

- Are there other Vermont towns doing this? Warren, VT has already voted in bond approval. 

- Could changes in town leadership impact the longevity of the project? Town manager Rich Svec and several SB members did not see this as an issue because if the system is working well, there is little reason to change course.

5.  Impact: Beyond the financial benefits, one expert in solar technology has estimated that Cavendish can reduce its carbon footprint by 3,818 tons of carbon dioxide, which is equivalent to planting 88,959 trees, reduce driving by 7,636,000 miles or eliminating 389,436 gallons of gasoline.

6. Next Steps: The board voted 4 to 1 to move forward with the solar bond initiative. Wendy Regier voted against the proposal. While a supporter of solar, she is concerned that more work needs to be done and that the proposed time schedule is too short a time frame.

The voters, by Australian ballot, will need to approve the floating of a bond. Since there will be a primary election on August 26, it would make sense to include the bond vote at this time.

There will be a special town meeting for discussion and education purposes only. In addition, information will be posted to the town website. 

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