Bromfield’s large-capacity solar photovoltaic (PV) project is delayed until at least next year, despite efforts by Solar Design Associates, the School Committee, and the recently formed Harvard Energy Advisory Committee (HEAC) to get solar panels installed this summer.
State and federal initiatives have made million-dollar projects like this possible at no cost to the town. Details of the same initiatives are also responsible for the show-stopping delay.
Current federal legislation allows a business a 30-percent investment tax credit (ITC) to install solar PV and solar thermal systems, credits worth an equivalent of 2 to 3 cents per kilowatt hour (kWh), according to U. S. Senator Roscoe Bartlett’s office. These credits are set to expire at the end of 2008. Congress initially included in the most recent energy bill a solar ITC renewal, paid for with reductions in subsidies to oil companies. The president threatened to veto any energy bill that reduced oil subsidies and the solar ITC portion of the bill was removed. Uncertainty about successful renewal of the ITC before the December deadline has left businesses, installers, and suppliers scrambling to complete projects before Dec. 31.
Because federal incentives apply only to tax-paying entities, municipalities were not eligible to take advantage of them. However, a third-party commercial entity can own and operate a solar PV array, get the tax credit and sell the generated power to the school at a reduced rate. According to Steven Strong of Solar Design, the federal incentives and recent increases in the governor’s Commonwealth Solar program make it financially possible for a “third-party entity to design, procure, install, own, operate, and maintain a commercial-scale, roof-top solar electric system of 125 to 135 KWh at Bromfield at no cost to the town. The school would agree to purchase the solar-generated electricity from a third party under a 20-year power purchase agreement. The offer would start the solar power sale at a rate below the current cost of utility power (proposed: $.12033 per kWh) with an annual escalation of 3 percent,” Strong explained.
“At the end of the 20-year agreement,” he added, “the town would have the opportunity to renew the power purchase agreement (PPA), purchase the system, or have it removed. The town would also have the option of purchasing the system after six years at what would then be determined as ‘fair market value.’”
Bromfield’s solar capacity is dependent on the amount of useable roof space, which is somewhat limited by existing HVAC equipment and ventilators. Strong estimates that a 125 to 135 kWh capacity is possible, supplying about 12 percent of Bromfield’s current electric energy use.
Even though there is no procurement cost to the town, the state requires the town to advertise and solicit a request for proposal (RFP) before a PPA can be approved, a requirement that is anticipated to add several months to the process. Without the solar tax credits that are dependent on a guaranteed December installation or renewed legislation, a third party cannot afford to support the project.
HEAC member Bill Blackwell and town Finance Director Lorraine Leonard attended a Massachusetts Renewable Energy Trust seminar to learn more about the state’s PPA program and related RFP requirements. They are writing an RFP contingent on ITC renewal legislation.
HEAC is arranging a comprehensive energy assessment of the Bromfield building through National Grid’s Whole Building Assessment Program for commercial and municipal customers. The program includes a detailed energy audit and rebates on energy conservation measures.
HES is not forgotten, but initial attention is going to Bromfield, the largest municipal energy consumer. Strong estimates that the HES roof may support a 50 kWh system.
