Waitsfield Select Board members and a room full of citizens queried representatives of a Burlington company that wants to install an $800,000, 150kW photovoltaic solar power array on a piece of town property by the end of 2010 this week.

The select board held a special meeting at the town offices on May 10 to hear from Chad Farrell, principal of the Encore Redevelopment company, based in Burlington. Farrell and an associate, Dan Smith of the Arno Company, came to the board to present the solar power proposal.

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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