Solar projects continue to pay off for towns and developers

By Doug Fraser

Posted Jan 10, 2020

HARWICH — Towns on Cape Cod and Martha’s Vineyard received more than $3.4 million in credits and cash in the last fiscal year as municipal solar power installations produce both power and profits.

It’s a trend that is expected to continue well into the future, as the renewable energy industry gains a firmer foothold in the state economy every year.

“This has taken care of our entire municipal energy budget ... It certainly has paid off,” said Shareen Davis, chairwoman of the Chatham Board of Selectmen.

The Cape and Vineyard Electric Cooperative brokered the region’s first solar projects in 2010, putting photovoltaic panels on the roofs of schools and other municipal buildings in a handful of towns. Two more rounds of projects followed in 2014 and 2015, with 11 and 12 megawatts of power, respectively. These were mostly large projects — such as solar farms on capped landfills — that returned more than $13.7 million in money in energy credits to towns since 2010.

According to cooperative data, Chatham, for instance, received $208,398 in fiscal 2019 by generating nearly 2.7 million kilowatt-hours of electricity at its landfill’s photovoltaic array. The town has generated nearly $555,000 in solar power revenue in the past three fiscal years.

Barnstable, the largest Cape municipal solar power generator, received nearly $802,000 in fiscal 2019 by producing 11.3 million kilowatt-hours of electricity.

These projects cost the towns no money. The cooperative arranged 20-year contracts with developers that generally gave them 40% of the money paid for the electricity by the power utility company, typically Eversource.

Eversource paid $1.94 million for Barnstable’s electricity, and the developer received $770,000 of that, according to cooperative data. Out of the $6.7 million paid for solar power generated by photovoltaic panels on municipal land and rooftops in the last fiscal year, a little over $3 million went to the developers, while $3.34 million was paid to towns.

“We’re excited about it,” said Larry Ballantine, chairman of the Harwich Board of Selectmen.

Harwich has one of the Cape’s largest solar farms at its landfill, producing nearly 3.6 million kilowatt-hours of electricity that grossed $607,951 in payments or credits from Eversource in fiscal 2019. Of that figure, $441,216 was paid to the town.

“We did not put any money in (for the solar power project),” Ballantine said. “We need more win-wins and more solar.”

While millions of dollars may pass through its hands, the cooperative operates on a shoestring budget. It received a little under $300,000 in administration fees in fiscal 2019, enough to allow it to break even after paying expenses and salary, according to cooperative president Leo Cakounes.

“CVEC is not in the business of making money,” he said. “That’s not what we’re about. We’re a cooperative. We’re just trying to stay afloat and pay the expenses of running an office.”

But as towns reached their limits in terms of the amount of solar power they need to meet their demand, CVEC found revenue flattening out just as it was expanding to meet space and personnel demands as new projects called for more staff.

The cooperative budget is a little too close to the bone for comfort, Cakounes said.

“We are constantly looking for other ways to bring in revenue,” he said.

In the first big round of projects in 2014, the cooperative didn’t charge towns any administrative fees. But in recent years, it has been asking member towns to voluntarily pay a quarter of a cent on each kilowatt-hour on revenues from those landfill cap projects. All of the succeeding project rounds have had that fee built into the contracts.

“It’s not a big ask for the towns but it makes a big difference to us,” CVEC manager Liz Argo said.

Solar power momentum lagged when state incentives for installations were in limbo for a few years. Solar projects for CVEC dried up for nearly four years.

“Lots of companies almost or did go bankrupt,” Argo recalled.

But Massachusetts is now considered one of the national leaders in the clean energy industry. Boston has been ranked first in the nation four years in a row by the American Council for an Energy Efficient Economy, and the state was ranked No. 1 in leadership in energy and environmental design by the US Green Building Council in 2017 and 2018.

In 2018, the state Department of Energy Resources unveiled its Solar Massachusetts Renewable Target (SMART) program, with incentives to add 1.6 gigawatts of solar power. The cooperative now has three more rounds of municipal solar projects close to completion and a fourth in the wings.

Already in the installation phase is a relatively small group of projects to put solar panels on the roofs of seven libraries, fire stations, a community center and wastewater treatment plant from Oak Bluffs to Provincetown.

Argo said the contracts are all signed on the next round, but the cooperative is awaiting Eversource approval and town permits for 12 megawatts of power that include many solar canopies (open, roofed structures in parking lots and golf courses); and a community solar project in Harwich in which the town offers solar power benefits to residents. Three schools in Sandwich will also benefit from solar power installations in this round, as will Monomoy Regional High School in Harwich.

These projects as well as those in the following round, which are still in the design phase, may prove the most interesting as a number will incorporate power storage, something the state is using as an incentive in its SMART program.

Battery storage technology has greatly improved in recent years, and the state would like to see buildings equipped with both photovoltaic panels and batteries to store the power generated during the day for use at night or on cloudy days.

Even more intriguing is the idea of utilities paying more for power that can be tapped during periods of high demand, such as early morning and early evening when people are leaving for, and returning from, work. Battery storage would allow solar power producers to keep their power on site and then release it when they will get the highest price.

“It’s a fantastic benefit to towns,” Christopher Powicki, an energy consultant and advocate from Brewster, said of the solar power energy credits and revenues. “They essentially get free money.”

But some argue the municipal solar power system needs some tweaking.

In some towns, the money is credited against their electric bill, but for most the accounting is too burdensome to credit the payments to multiple facilities, and Eversource or another utility simply writes the town a check. That money generally goes into the general fund, but Powicki would like to see a dedicated fund established that would use the money to pay for other green initiatives like electrifying the town’s fleet of vehicles.

Cakounes was concerned that it was hard for towns to track whether their revenues were actually paying for all their utility bills or whether they may need to expand their solar footprint to account for new buildings or old facilities that had been closed.

Powicki said Brewster hired a consultant to keep track of maintenance issues and to get developers, who are tasked with upkeep in their long-term operation contracts, to make repairs in a timely fashion so that the solar array was producing the maximum power.

“There may be a downside of towns not having skin in the game,” he said. “Maybe the systems are not operating at 100% capacity.”