City tentatively approves solar energy lease

Wednesday, December 22, 2010 | 3:23 p.m. CST

COLUMBIA — The City Council approved a lease at its meeting Monday evening to bring solar power equipment to Columbia.

The lease was signed with Omaha-based Free Power Co., which provides customers with solar panels to lower the cost of energy.

Connie Kacprowicz, spokeswoman for the Columbia Water and Light Department, said Tuesday the company can now continue the process of site selection with the city on Jan. 3, after which it will deliver the solar panels and later begin installation.

Kacprowicz said a likely site for the project under consideration is the department's West Ash Street pumping station at Bernadette Drive and Tiger Lane.

Kacprowicz said Water and Light is responsible for site preparation such as fencing or necessary tree removal and for connecting the solar panels to the city's power grid.

The city's initial investment will be the money spent on site development, Kacprowicz said.

"If they don't deliver power, then we don't pay for it," she said.

The lease stipulates that Free Power Co.'s solar panels will produce 6,000 megawatt-hours annually by Sept. 30, 2011, and 12,000 megawatt-hours annually by Sept. 30, 2012. The city will pay a monthly leasing fee of $54 per megawatt hour.

“The benefit is enormous — solar power at a cheap price,” Sixth Ward Councilwoman Barbara Hoppe said at the council meeting.

But although the agreement passed 6-1, council members raised questions about Free Power Co.

“There is concern because we didn’t get a lot of information, and there are unanswered questions." Hoppe said.

Mayor Bob McDavid voted "a timid yes" while other council members expressed apprehension about the quick time frame and lack of information. 

"It seems to be high pressure tactics to get it done and get it done now without a plan," Fifth Ward Councilwoman Laura Nauser, who opposed the measure, said at the meeting.

"They are telling us how fast the horse is but we can't see the race," Fourth Ward Councilman Darryl Dudley said at the meeting.

Water and Light Director Tad Johnsen said the department has been talking with Free Power since September or October, though the council has only been discussing this issue for about a month.

Johnsen said Wednesday the department did not initially know that the agreement had to be signed by Dec. 21, but as the process developed Free Power Co. wanted an agreement for tax incentives.

Despite the concerns, council members did express their trust in the Water and Light department.

"I don't like making decisions when I don't have answers, but I have confidence in Water and Light," Nauser said Tuesday.

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Paul Allaire December 22, 2010 | 5:23 p.m.

I will make it a point to watch for more news about this project. I want to measure it's success.

(Report Comment)
Mark Foecking December 23, 2010 | 8:15 a.m.

Few back-of-the-envelope calc's for perspective:

Say they can install thin-film panels for about $2.50/peak watt. The size of the array required is about 5 megawatts, so that's $12.5 million dollars.

They will generate 6,000 megawatts-hrs/year at $54/megawatt-hr, so that gives a revenue of $324,000/year. These panels are typically warranted for 20 or 25 years, so that gives a best case total return of $8.1 million.

But wait! Federal production subsidies for solar PV run approximately $24/megawatt-hr (more than 15 times the production subsidy for any conventional source including nuclear), so that gives them another $3.5 million. Add in some installation tax credits and they will start to make a little money on the deal.

So I think this could be a legitimate, decent deal, and I think the city should go ahead with it. Understand this is only enough energy to power roughly 600 homes, but it's a start.


(Report Comment)
Mark Foecking December 24, 2010 | 4:55 p.m.

One other little caveat - in weather like this they produce zero electricity unless you clear the snow off them. While it is relatively simple for me to do that (albeit dangerous) cleaning snow off of a 5 MW solar array is a totally different beast. If not cleared, the panels will sit useless for a week until the sun melts the snow.


(Report Comment)
Paul Allaire December 24, 2010 | 5:13 p.m.

My thoughts are that if the subsidy allows manufacturing at any scale eventually the cost of production will fall to the point where it is economical without the subsidy. I realize that, unfortunately, the prices of solar chips have not been falling like computer chips. My hope is that the subsidy can correct this by bringing enough capacity on the market that the prices do fall.

(Report Comment)
Mark Foecking December 24, 2010 | 5:18 p.m.

Third little caveat - large hail is likely to destroy this array at least once in its 25 year life. Missouri isn't California.

My panels are tested for 1 inch hail, and at the angle they are mounted they will take golf-ball size or a little greater. I also suspect my panels are of higher quality than those that FreePower will install.

We've had two incidents of baseball to grapefruit size hail in the 17 years I've lived here, and the frequency of these events will likely increase with climate change. I hope the company doing this has insured against these events.

(Questions I would have asked were I on the Council)


(Report Comment)
Mark Foecking December 24, 2010 | 5:32 p.m.

Paul Allaire wrote:

"My hope is that the subsidy can correct this by bringing enough capacity on the market that the prices do fall."

Actually PV prices have fallen a lot since I installed my stuff - you can get top quality polycrystalline silicon panels for about $4/peak watt, and thin film for $2.50 or so. It's that they're still not competitive with conventional sources without subsidy, and to install truly game-changing amounts of them (were they available) would cost the government hundreds of billions of dollars that it doesn't have.

Conventional energy suppliers don't fear solar and wind. In fact, they'd love to have an energy source that didn't use any fuel. It's the fact that these sources generate at random, and are difficult to integrate into a grid designed for predictable energy sources, that keeps them from investing more heavily in renewables.


(Report Comment)
Paul Allaire December 24, 2010 | 6:30 p.m.

I'm just saying that part of the reason the price is lower now is because more manufacturing capacity is in place. It has taken a long while for the price to come to what it is. Even without any subsidy, the amount of panels sold will increase and the price will fall. I think a bit of subsidy would increase capacity in the short term and that capacity will decrease prices in the long term. The decreased prices will add to the demand which will increase capacity whi... .... .... ...... etc...

(Report Comment)

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