SOUTH PORTLAND — City officials are moving forward with a cost-saving plan to build a solar power array on the former municipal landfill off Highland Avenue.
ReVision Energy of Portland has sweetened the terms of its proposal to build the solar facility, reducing the price that the city would pay for electricity generated by the array from 12 cents to 10 cents per kilowatt-hour under a power purchase agreement.
ReVision revised its offer after legislation to reform Maine’s solar regulations failed last spring, causing several communities to pull back from solar proposals without the means to make them financially viable.
“I think ReVision was really willing to work with us,” said Julie Rosenbach, the city’s sustainability coordinator. “The project economics look very good. We would save more in energy costs than we would pay to finance the project.”
Rosenbach and other city administrators are expected to pitch ReVision’s latest proposal at a City Council workshop on Aug. 22. A formal vote will follow at a regular council meeting.
“The new terms that ReVision has offered make it an acceptable proposal to bring to the council,” said City Planning Director Tex Haeuser, a longtime advocate for building a solar farm on the 34-acre landfill.
Rosenbach teamed up with Portland officials to negotiate separate agreements with matching terms for ReVision to build a solar array atop each city’s capped solid waste landfill.
The Portland City Council’s Energy and Sustainability Committee voted 3-0 Wednesday to recommend the revised proposal for a solar farm on that city’s the 44-acre landfill off Ocean Avenue. The full council will take it up next.
“By doing it jointly, we’d actually be saving some funds, so I’m optimistic,” said South Portland Mayor Tom Blake.
Under the proposal, ReVision would build a 660-kilowatt array on each city’s landfill. Each array would serve a maximum 10 municipal meters – the largest possible under Maine law.
ReVision can afford to build the arrays in part because, as a for-profit company, it would receive federal solar investment tax credits, which provide a tax reduction equal to 30 percent of a project’s costs. The cities aren’t eligible for a tax credit because they are nonprofit entities.
Each city would make an initial investment of about $25,000 per year for six years. The initial $150,000 investment is expected to be paid back within 10 years through energy savings.
“That’s based on conservative estimates, so people can say that’s not far-fetched,” said Assistant City Manager Josh Reny.
Each facility would generate about 1.2 million kilowatt-hours of electricity annually. That’s nearly 12 percent of the 10.1 million kilowatt-hours used annually by South Portland’s municipal and school facilities, Rosenbach said. And it’s about 3.5 percent of the 35.6 million kilowatt-hours used by Portland’s municipal and school facilities – enough to power Portland City Hall and Merrill Auditorium for a year.
The facilities are expected to be in cash-positive positions by the seventh year of the agreement, when each city would anticipate buying its array for $1.6 million, financed through a 20-year bond at 3 percent interest.
South Portland officials hope to cut the cost of financing the buyout, Rosenbach said, possibly by setting up a solar fund, where the city would set aside money for several years in advance, with an eye toward reducing or eliminating borrowing altogether.