Dec 2016 Newsletter: Providing Municipalities with an Easier Path to Solar Power

Municipalities throughout Westchester now have an additional opportunity to get power at a reduced rate, while helping to lead the way to a greener economy and reducing their reliance on carbon-based generation—and fixing their cost for electricity for 25 years.

Sustainable Westchester’s Municipal Solar Buyers Group was designed to help local Westchester Countysolarpanelwithribbon municipalities pursue solar-generated electricity by pooling their buying power. First conceived in 2012 as local governments became interested in locking in lower electric rates for the future, it has now completed its first two stages and is well into the third. “I expect we’ll start seeing these panels from the program popping up by the spring,” says Bob Elliott, the organization’s interim executive director.

The MSBG initiative grew out of the fact that in the private sector, nearly 50% of the investment in solar can be earned back with federal and state tax benefits. But since municipalities don’t pay income taxes, these same incentives are not available to them. In lieu of such tax incentives, MSBG substituted the incentive of driving down the cost of solar development by pooling buying power.

“The point of the program is to pool buying power of all of our municipal members, which is nearly all municipalities in Westchester,” said Dan Chorost, a member of SW’s board of directors. . “The first step was putting it out to bid and selecting a solar developer.” He said about a dozen responses were received from solar developers.

“We hired two firms, PNC and GP Renewables, to be energy consultants,” said Chorost. “Our two consultants analyzed all of the bid responses. The selection was based on criteria that included the best combination of price, value, experience, competence, and financial strength, among others.”

In the end, Next Era Energy Resources—one of the largest solar developers in the country, and with an office in White Plains—was selected and presented to Sustainable Westchester, which approved the selection.

As counsel, Chorost began negotiating the agreements with Next Era. “Our goal was not only to get the price down, but to do for members all the mundane but time consuming legal work needed to get this kind of thing off the ground,” said Chorost. “That was the second step: to prepare all the legal documents, developing a model PPA (Power Purchase Agreement) which we’ll take to each of the municipalities.”

“The third step, which we’re just starting now, is to go to all of our members, say we have this exciting program, and ask for a list of potential sites,” said Chorost. Some of the possible sites for solar panels could include police stations, landfills, over municipal parking lots, or on the roofs of municipal salt sheds and storage or maintenance sheds. “We will bring each town’s prospective sites to Next Era, and they will analyze each site our members think might be appropriate. Our team will work with each of our members individually, analyze every potential site, and provide them with all the information they need. To the extent that our analysis shows that we can’t competitively put solar on that site, we won’t recommend it— it’s as simple as that.”

Chorost points out that the price of electricity has never gone down over the long term. “We expect that the price of energy is going to go up, and we expect that the price of electricity from these solar panels is going to save municipalities quite a bit of money,” said Chorost. “Nobody can guarantee those things but we expect that this is going to happen. And we got great pricing from Next Era—I think significantly lower than what most of these municipalities are paying for electricity.” Next Era did not have to promote their model from town to town or negotiate 20 or 30 different times for a PPA. “They saw an opportunity, just like we saw an opportunity, to develop a significant number of solar sites across the county, and that drove the prices down,” said Chorost.

Essentially, municipalities will be buying clean power at a fixed cost for 25 years at no money down. “Members won’t pay a dime for any of these systems,” noted Chorost. “Next Era is going to finance the whole thing, and they’re paying for our consultants and our lawyers.” Municipal budgets thus become a bit more predictable, at least as far as electricity cost.

Another advantage for municipalities is that all the legal work has been done for them in advance. “I expect that each is going to go over the document, and we may have a little tinkering to do from municipality to municipality, but the major work has been done,” said Chorost. “We’re not going to be negotiating the whole thing from scratch.” And municipalities do not have any obligation to participate; after reviewing the proposal, they have the option to take it or leave it—though Chorost hopes they take it.

“I think it’s important for residents and everybody to see solar panels—they’re affordable and an outstanding way to make a real environmental difference,” said Chorost. “Municipalities have a real opportunity here to get in on something, do a good thing for the planet, and help lead the way to a greener economy,”