Solar Array Project
Background and Scope
In the fall of 2021, the reinvigorated Plymouth Energy Commission (PEC) began a new exploration into the feasibility of a solar array to offset municipal electrical use. Given the trend of increasing electric rates and increasing urgency for renewables, photovoltaic electric production linked to the grid made sense to the PEC. Based on the current system of NHEC payments for electrical production, any power generated can be used to decrease the electrical bills paid by the town. Thus the PEC, in consultation with the Selectboard, deemed a solar project worthy of formal consideration by the town.
The Voters of Plymouth passed a warrant article at the 2022 Town Meeting, empowering the PEC to launch the process of solar contractor involvement and to allow establishment of a capital campaign through loans, grant acceptance, or bond, as well as to accept other available funding. The PEC began by collating historical electrical usage data and carrying out preliminary site investigations. Factors of size, orientation, roof suitability, electrical demand, access to interconnection, and consideration of potential alternative uses of town-owned property were evaluated. Then a process for contractor selection was developed in accordance with the town’s practices.
A Request for Qualifications (RFQ) was sent out in the spring of 2022 and three applicants responded. Two solar contractors met the PEC’s criteria and were interviewed after proposals were reviewed. Barrington Power was recommended by the PEC and chosen by the Select Board in August of 2022. A Memorandum of Understanding (MOU) was signed, specifying that Barrington would assist in developing a solar array proposal, in alignment with town goals and collaborating with PEC, at no cost. Per the MOU, Barrington will construct the array if the voters approve the project at the 2023 Town meeting.
During the fall of 2022, Barrington and the PEC collaborated to narrow down options such as siting, type (rooftop vs ground mount), and array size. The most feasible proposal is a ground mount array, of 280 KW capacity, designed to produce enough electricity to offset 70% of the town’s average usage, at a site on Quincy Road. The first year’s generation is predicted to be 324,000 KWh. The potential site, on town land, is near the airport but has been cleared by the FAA to be in accordance with their safety regulations. Town buildings will still be hooked to the grid, avoiding the downside of the intermittent nature of solar electrical production. As planned, the solar array will have no moving parts, thus maintenance is minimal. The expected lifespan of the array is estimated at 35 years (warrantied for 25), and options for recycling or reuse of many of the array materials already exist.
The Select Board has been updated at regular intervals. A public hearing regarding the project was held on November 9, 2022, and the vast majority of the public speaking were in support. One speaker voiced concern regarding decommissioning costs. The PEC responded, noting that final project documents could include a contingency for decommissioning.
Financial Details (A cost/ benefit analysis can also be found on the separate excel spreadsheet)
The PEC has recommended to the Select Board that the array be financed via a tax-exempt bond of $686,000 through the Community Development Finance Authority (CDFA). A public bond hearing, specific to this project, was held on January 23, 2023, and there were no dissenters.
The rate for the bond is estimated to be 4.75%. The rate, however, could potentially be as low as 3%, if various criteria are met. Calculations of the cost of this loan (using 4.75%) vs. monies generated by the electricity made, reveal that, with the starting point of array completion, the array will generate more revenue than the annual cost of the loan every year. Conservative cumulative revenue over the 35 year lifespan is estimated to be greater than $1,000,000.
There is initial lag time during which revenues will not be reflected either in the town budget or the tax rate. The three reasons for this lag time are:
Loan payments will be made before and during construction, prior to electricity generation.
The town will receive a check each year from NHEC for the value of the electricity generated, using quarterly updated rates. This yearly check will exceed the cost of the loan payments by an average of $22,000 each year for the first 10 years of array operation. An average of $8,400 of that revenue will stem from the sale of “Renewable Energy Credits”. Lack of these credit sales will result in average annual revenue of $13,000 for the remainder of the loan. The monies gained by the town will increase dramatically to an average $43,000 /year after the loan is paid off. The array should last 35 years, and an industry- wide acceptable decrease in efficiency is included in the modeling.
While the project was under development before the Inflation Reduction Act (IRA) passed Congress, the IRA has a significantly favorable financial impact and is a strong motivator to proceed with the project this year. We are at a sweet spot, as the project is ready to go, whereas many other municipalities are still scrambling to develop projects to take advantage of the IRA’s financial benefits. Our modeling includes a 30% Direct Payment and a 10 % bonus (due to the per capita income status), as well as a state rebate of $10,000. The actual monies amortized over the lifetime of the loan should thus be only $401,600, as the town is eligible for $274,400 via Direct Payment under the IRA. Given our readiness, these incentives should all be available. Legally, however, the town must appropriate the entire $686,000, which is why the warrant is written with the full amount.
Even if the IRA and NH state incentives are not available, the effect of the array is net monetary gain for the town. Electric rates over the past twenty years have shown fluctuations, but the overall trend has been an increase , and the PEC believes it is prudent to proceed with this investment, as summarized below:
Summary of Benefits to the Town:
The Plymouth Energy Commission thus asks for your support on March 15th:
Vote YES on Warrant Article 10.
In the fall of 2021, the reinvigorated Plymouth Energy Commission (PEC) began a new exploration into the feasibility of a solar array to offset municipal electrical use. Given the trend of increasing electric rates and increasing urgency for renewables, photovoltaic electric production linked to the grid made sense to the PEC. Based on the current system of NHEC payments for electrical production, any power generated can be used to decrease the electrical bills paid by the town. Thus the PEC, in consultation with the Selectboard, deemed a solar project worthy of formal consideration by the town.
The Voters of Plymouth passed a warrant article at the 2022 Town Meeting, empowering the PEC to launch the process of solar contractor involvement and to allow establishment of a capital campaign through loans, grant acceptance, or bond, as well as to accept other available funding. The PEC began by collating historical electrical usage data and carrying out preliminary site investigations. Factors of size, orientation, roof suitability, electrical demand, access to interconnection, and consideration of potential alternative uses of town-owned property were evaluated. Then a process for contractor selection was developed in accordance with the town’s practices.
A Request for Qualifications (RFQ) was sent out in the spring of 2022 and three applicants responded. Two solar contractors met the PEC’s criteria and were interviewed after proposals were reviewed. Barrington Power was recommended by the PEC and chosen by the Select Board in August of 2022. A Memorandum of Understanding (MOU) was signed, specifying that Barrington would assist in developing a solar array proposal, in alignment with town goals and collaborating with PEC, at no cost. Per the MOU, Barrington will construct the array if the voters approve the project at the 2023 Town meeting.
During the fall of 2022, Barrington and the PEC collaborated to narrow down options such as siting, type (rooftop vs ground mount), and array size. The most feasible proposal is a ground mount array, of 280 KW capacity, designed to produce enough electricity to offset 70% of the town’s average usage, at a site on Quincy Road. The first year’s generation is predicted to be 324,000 KWh. The potential site, on town land, is near the airport but has been cleared by the FAA to be in accordance with their safety regulations. Town buildings will still be hooked to the grid, avoiding the downside of the intermittent nature of solar electrical production. As planned, the solar array will have no moving parts, thus maintenance is minimal. The expected lifespan of the array is estimated at 35 years (warrantied for 25), and options for recycling or reuse of many of the array materials already exist.
The Select Board has been updated at regular intervals. A public hearing regarding the project was held on November 9, 2022, and the vast majority of the public speaking were in support. One speaker voiced concern regarding decommissioning costs. The PEC responded, noting that final project documents could include a contingency for decommissioning.
Financial Details (A cost/ benefit analysis can also be found on the separate excel spreadsheet)
The PEC has recommended to the Select Board that the array be financed via a tax-exempt bond of $686,000 through the Community Development Finance Authority (CDFA). A public bond hearing, specific to this project, was held on January 23, 2023, and there were no dissenters.
The rate for the bond is estimated to be 4.75%. The rate, however, could potentially be as low as 3%, if various criteria are met. Calculations of the cost of this loan (using 4.75%) vs. monies generated by the electricity made, reveal that, with the starting point of array completion, the array will generate more revenue than the annual cost of the loan every year. Conservative cumulative revenue over the 35 year lifespan is estimated to be greater than $1,000,000.
There is initial lag time during which revenues will not be reflected either in the town budget or the tax rate. The three reasons for this lag time are:
Loan payments will be made before and during construction, prior to electricity generation.
- The first NHEC check will be issued no earlier than March of 2024.
- The town’s fiscal year runs from July 1, 2023 to June 30, 2024 and therefore any revenue
- generated by the array before June 30, 2024 cannot be calculated to offset the
- 2023/2024 budget.
The town will receive a check each year from NHEC for the value of the electricity generated, using quarterly updated rates. This yearly check will exceed the cost of the loan payments by an average of $22,000 each year for the first 10 years of array operation. An average of $8,400 of that revenue will stem from the sale of “Renewable Energy Credits”. Lack of these credit sales will result in average annual revenue of $13,000 for the remainder of the loan. The monies gained by the town will increase dramatically to an average $43,000 /year after the loan is paid off. The array should last 35 years, and an industry- wide acceptable decrease in efficiency is included in the modeling.
While the project was under development before the Inflation Reduction Act (IRA) passed Congress, the IRA has a significantly favorable financial impact and is a strong motivator to proceed with the project this year. We are at a sweet spot, as the project is ready to go, whereas many other municipalities are still scrambling to develop projects to take advantage of the IRA’s financial benefits. Our modeling includes a 30% Direct Payment and a 10 % bonus (due to the per capita income status), as well as a state rebate of $10,000. The actual monies amortized over the lifetime of the loan should thus be only $401,600, as the town is eligible for $274,400 via Direct Payment under the IRA. Given our readiness, these incentives should all be available. Legally, however, the town must appropriate the entire $686,000, which is why the warrant is written with the full amount.
Even if the IRA and NH state incentives are not available, the effect of the array is net monetary gain for the town. Electric rates over the past twenty years have shown fluctuations, but the overall trend has been an increase , and the PEC believes it is prudent to proceed with this investment, as summarized below:
Summary of Benefits to the Town:
- Dependable financial gain for the town of Plymouth
- Renewable energy investment
- Decreased carbon footprint
- Alignment with ecotourism vision
- Optimizing federal support by timing in 2023
- Pursuing energy independence
- Increased utilization of town-owned land
- In keeping with two sections of Plymouth’s Master Plan
The Plymouth Energy Commission thus asks for your support on March 15th:
Vote YES on Warrant Article 10.