Two years after responding to a request for proposal by the Community Development Department’s Office of Sustainability, Affordable Solar, based in Albuquerque, began construction on January 22 for the long awaited Large Scale Solar Photovoltaic (PV) Project at the Silver City Wastewater Treatment Plant (WWTP). Through a unique, legislated financial arrangement called a “Power Purchase Agreement” (PPA), the Town is expected to save an estimated 3-4 million dollars over the next 20 years on electrical costs based on the energy that will be provided by the solar array.
Since municipalities don’t pay taxes and can’t get the tax rebates and tax credits for solar projects that a private solar developer can, it’s possible for a private company to arrange the financing, install, own and maintain a solar photovoltaic array, and sell the power to the municipality at a rate cheaper than the current utility price. Affordable Solar is the designer, builder, owner and maintainer of the WWTP solar system. The municipality’s sole responsibility is to purchase the electricity from Affordable Solar at 6.9 cents per kilowatt-hour (kWh), with no price escalation for the 20 year contract period. The current rate paid to PNM for the WWTP is 10.5 cents/kWh, which is expected to increase over the same 20 year period.
The six acre site adjacent to the wastewater treatment plant will be covered with just under 4,000 photovoltaic panels and will produce enough power to offset approximately 80% of the treatment plant’s electrical costs. The system is just over one megawatt DC in size, which is enough to power about 175 average residential homes.
Ryan Centerwall, General Manager, Project Group, at Affordable Solar expects the four month construction project be up and running by May of 2013. He said “We feel comfortable going into this PPA knowing these systems are quite reliable. Being in the solar industry, we feel it is important to show our commitment to the business by making long-term investments in solar assets. We are happy to be able to deliver a 20 year fixed price to the town that is well below their current utility rate. It’s a good deal for both Silver City and Affordable Solar”.
Nick Sussillo, Director of the Office of Sustainability, is pleased that this is finally coming to fruition. “I first heard about this PPA arrangement in May 2010 from the City of Santa Fe’s Energy Specialist, now Acting Director of Housing and Community Development, Nick Schiavo. It sounded too good to be true: Santa Fe signed a contract to purchase power from a third party solar entity who would own and maintain the system; no money was invested by Santa Fe, and yet they would be saving millions over their contracted 20 year agreement. Schiavo said Silver City could do this too. We are now on our way.”
Silver City Town Manager, Alex Brown, has led the contract negotiations, supported by Robert Scavron, Esq., Town Attorney, and Nick Sussillo. Peter Russell, Director of the Community Development Department, has supported the project from behind the scenes, playing a key guiding role. Technical consulting was provided by Robert Esqueda, Director of Utilities for the Town; Kurt Albershardt, owner of the Murray Hotel, and Jim Kerstetter, former professor at the University of Washington, all three of whom were members of the Town’s project evaluation committee.
An event to celebrate the in-process construction of the Array will be planned for late February, and a christening event is planned once the Array is operational in May. The public will be invited to both events.