Future uncertain for Quaboag solar project

 

For now, work continues

 

By Jonathan Cook

Turley Publications Reporter

WARREN – It’s big and green, and it rhymes with heck. That’s right, it’s SREC (no, not Shrek). Solar Renewable Energy Certificates, or SREC’s, are an incentive for owning solar power systems in this state and others. And they are a vital component for the completion of a plan to install solar panels on all three school buildings in the Quaboag district.

However, they have been challenged in court and could be deemed null and void by the U.S. interstate commerce law if a Canadian energy company has its way.

According to representatives from Nexamp, the company planning to install and own 314,397 kilowatt hours of solar generated electricity located on the rooftops of the Quaboag schools, the lawsuit will likely fail to stop the SREC market. The SREC market was created by a state law that requires utilities to own a Renewable Energy Portfolio. Owners of solar energy systems have SREC’s based on their energy production. Utility companies are required to buy SREC’s toward fulfilling their portfolio requirements.

In the case of Quaboag, SREC’s would account for 35 percent of the costs incurred by Nexamp, an amount that is essential for the project to go forward.

Nexamp’s Brad Hunter explained, “These projects are made possible by a number of incentives.” They include rebates, tax credits and SREC’s. To make a project work, “It takes all these things together,” he said.

Superintendent Brett Kustigian said 20 percent of the financing comes from a state rebate, which has already been approved. Also, a federal rebate accounts for 30 percent. Fifteen percent is private financing. SREC’s are needed to provide more than one third of the financing package.

Still, said Hunter, “At this point we feel optimistic that this is going to resolve itself. But, it’s not going to be overnight. It’s probably going to be over the course of a month or two before I can come back in here and say, yup, we’re all set to go.”

In a month, the project schedule is in the permitting stage. In two months, the project will need to lay out capital funds to procure materials, including solar panels. A couple of weeks before that can happen, Hunter said, “We would need resolution.”

He added, “In the meantime, what we’re doing on our end is taking a lot of steps, including system design analysis, and structural analysis (to stay) on a path to get this done before school starts (this fall).”

However, he said, “It’s certainly a concern of mine right now.”

Nexamp Vice President Jonathan Abe elaborated on the court case, saying the lawsuit is directed at the part of the law that requires the solar portfolio to come from projects that are installed in state. “Trans-Canada is challenging it on the basis that that is in violation of interstate commerce law, which prohibits state regulation from favoring in state companies versus out of state companies.”

Yet, Abe said he is optimistic there will eventually be a positive resolution because the law has been challenged in other states and SREC’s have survived the previous challenges.

Hunter said the amount of electricity being designed for Quaboag will be equivalent to what is used on average in about 30 households. He explained the Power Purchase Agreement (PPA) between the district and Nexamp is mutually beneficial because the school district could not take advantage of the rebates on its own. By hosting the solar project, Quaboag would be guaranteed a rate of 10 cents per kWh. Currently the district pays about 11.5 cents per kWh.

That rate is expected to increase as it has for the past 30 years at a rate of at least five to six percent per year. If it continues to increase, the district would save an average of $40,216 per year for the next 25 years, or more than a million dollars.

Kustigian said, “That’s a significant savings over 25 years. You couple that savings with the savings the district made with the MSBA (Massachusetts School Building Administration) payment, and the taxpayers and the town and the residents of Warren and West Brookfield should be pretty pleased with the district because I don’t think too many departments right now can say they are actually saving the residents money.”