Township officials are hopeful a new solar energy project will provide over $255,000 in net profit for the municipality over the next 20 years.
Last week, council agreed to pay Essex Energy Corporation $14,855 to determine the feasibility of installing a solar photovoltaic project – possibly up to 157 kilowatts in size and costing close to $1-million – on the roof of the PMD arena.
Finance Director Mike Givens said to date Essex Energy and Local Authority Services (LAS), a subsidiary company of the Association of Municipalities of Ontario, have completed “pre-feasibility assessment” work on their own, at no cost to the township.
“But now it’s time to make a decision [on the feasibility study],” Givens said.
He explained Essex Energy has agreed to adjust the size of the project to meet the needs of the township, and he noted a 10kW ground-mounted project, which would cost $75,000 to $85,000, is also a possibility.
The 157kW project should produce $255,140 in net profit for the township over two decades, Givens said, using the following specifications:
– a 20-year term on a potential loan or debenture, at a 4.5% borrowing rate;
– a 20-year feed in tariff (FIT) contract from the provincial government;
– 1.5% annual degradation of the solar panels, as well as a 1.5% increase in annual maintenance costs; and
– 1.5% “contingency on the start-up costs.”
For example, in year one Givens estimates the township will receive $120,205 in revenue from selling the solar energy into the grid and it will have to pay $31,487 towards the loan, $44,337 in interest and $4,800 in maintenance – for a total net profit of $39,579.
In year ten, profit will fall to $104,000 with $46,998 to pay back the loan, $37,356 in interest payments and $5,488 in maintenance – for a net profit of $15,074.
In the 20th year, the project will actually produce a net loss of $16,445, but Givens said the overall net profit would be about $255,140 – and he stressed that he used “very conservative” estimates in his analysis.
“If we’re going forward, personally I’d prefer a ground mount,” said councillor Jim Curry.
Councillor Mike Downey replied he would not be in favour of locating the panels anywhere near the PMD arena, or any other publicly accessed building, because of possible vandals.
Givens said he understands the concern and replied the township does not have to locate a ground-mounted project at the arena, but the original idea was to find an additional revenue stream associated with the arena.
Curry then wondered aloud if the township really needs a $15,000 feasibility study when some of the work – such as determining if the PMD arena roof can handle the added weight – could be done by municipal staff.
Givens said a lot more than load bearing analysis is included in the feasibility study, which must be completed if the township wants to proceed with LAS and Essex Energy. He added the only way the township loses the $15,000 – to come from federal gas tax funds – is if council decides not to proceed with any project.
Curry also questioned how the township would conduct roof maintenance at the arena if the solar panels are in the way.
“Sorry, I can’t support it all,” he said of the proposal.
Council approved the study by a 3-1 vote, with Curry opposed.
