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B-P considers joining forces to reduce its solar farm fee

Tuesday, October 25, 2016 - Updated: 7:09 AM


Recorder News Staff

BROADALBIN -- The Broadalbin-Perth Central School District might be able to share an interconnection fee for its solar project with two other developers.

Superintendent Stephen Tomlinson told the board of education Monday about a preliminary discussion that was held with two solar developers.

In February, the board approved an 18-year power purchase agreement with a seven-year extension with Solar Liberty. Solar Liberty will construct a 10-acre, 2 kilowatt, ground-mounted solar array on land adjacent to the Perth campus. The district estimated $500,000 for the interconnection fee, which connects the solar project to National Grid. However, the district might be able to split the cost with two other solar developers in the same National Grid substation.

Tomlinson said the first solar developer within a certain substation of a grid is responsible for paying the interconnection fee. He was notified that two other solar companies are building ground-mounted solar farms within the substation. The district is on-track to complete their project first.

"None of us want to pay 100 percent and there seems to be a verbal agreement," Tomlinson said.

CSArch, which is managing the project for the district, is discussing splitting the interconnection fee with the other solar developers, who are interested.

"We agreed that a larger project would get a larger bear of the interconnection fee. Our project being 2 kilowatt out of a proposed 7 kilowatt," Tomlinson said.

National Grid has already confirmed the developers could share the cost.

"That significantly impacts our rate of return on the project we have conservatively estimated at half a million," Tomlinson said.

According to the district website, CSArch estimates BPCSD will save as much as $5.2 million in energy costs over the next 25 years. With the power purchase agreement, energy generated will result in credit to the district's National Grid account. The district will purchase energy at a lower rate through Solar Liberty.

Board president Edward Szumowski asked why the solar developers would want to split the cost with the district.

"One of the other things that most people don't realize is there is actually a law, a tax law, out on the books in New York state that says one of two things has to happen with solar projects, when you look at the taxation of the project," Tomlinson said. "We could decline participation in that law. That essentially gives a tax break for 11 years to all developed solar projects. We have an option to decline that, saying the solar developer and owner of that solar project is going to pay us tax, whatever that tax for the use of the life of the solar farm. For us, our use of life is 25 years."

The solar developers told CSArch they would split the interconnection costs if the district accepts the law as written and will not charge solar farm taxes for 11 years. Tomlinson said the taxes on assessed properties will be a lot more than when they were just an open parcel of land.

"The solar developers are concerned that the landowners will have to pay the tax," Tomlinson said. "The solar developers concern is that they[landowners who they lease from] wouldn't want to pay the tax for the life of the solar project."

He said there should update on the preliminary conversation at next month's board of education meeting.

The project is still on track to start by the end of 2016 and possibly be completed by the spring.

"What we realized, is that the taxes we would receive over 11 years of that solar farm would be significantly less than what they would actually see in the interconnection cost," he said.