Rich Winter, owner and CEO of Delaware River Solar, based in New York City, is proposing five two megawatt community solar arrays in two different Newfield locations, one on Millard Hill Road and the other on Burdge Hill Road.
One of the major stumbling blocks that needs to be worked out before the projects can proceed is just how the county, town and school district can collect some sort of revenue from the projects given that solar arrays are exempt from local property taxes in the state of New York.
Over the last few months, the Tompkins County Industrial Development Agency has been working on developing a Payment in Lieu of Taxes (PILOT) program and is currently proposing that Delaware River pay $8,000 per megawatt per year plus a two percent increase each year to account for inflation.
The payments would be divided between the three municipalities.
See what Winter has to say about the PILOT, the eventual decommissioning of the arrays and the usefulness of sheep in part two of our Q&A.
Q: Within the last two years, NYSERDA (New York State Energy Research and Development Authority) has announced incentives for community solar projects. How do the NYSERDA grants work?
A: The way the program is set up, there’s a queue, so every substation can only handle “x” amount additional power. If others are in queue ahead of me and I drop a project, let’s say the [contested] one that we’re discussing, we wouldn’t be able to do a project [using that substation] at all.
In Newfield there are five spots and I’m on number two or three out of 678. I’m cautiously optimistic, but I won’t know until I get some clarity about what the queue looks like.
Q: That sounds like a crazy system to try to plan around.
A: It is, and it’s about to get crazier. The queues are full across the state, but there’s been no movement in the projects, so the commission is attempting to clear out the queue and get rid of those that are not viable or real.
So in the next two or three months we’ll see it clear out a little bit.
Community solar is a push. NYSERDA offers grant program that is up and running, but there’s limited capacity because there’s a fixed number of interconnection spots and value credits NYSERDA is offering.
It’s a cash payment spread out over four years. NYSERDA has broken them into what they call blocks, and on average each one is 200 megawatts.
So the first block is most lucrative, then it goes down with each subsequent block. We’re currently in the middle of block eight.
The idea is, as time goes on, people get more efficient and only best projects get done. In the beginning the difference between block one and two is not that great, but block seven might be materially different, and we’re seeing some projects pencil in these lower blocks.
The assumption is that the cost to build will go down over time as the program gets more ramped up and efficiencies will be gained, NYSERDA is saying, “OK, you’ve got to share those with us.”
Q: How much do you get in NYSERDA grants for each array?
A: For block eight it’s just under one million dollars, $938,000 per two megawatt project. One other twist to the NYSERDA grants is that there are strategic zones where the grants are bumped up by 20 percent because the state has a desire to see projects there.
Newfield is in a strategic zone, so there is an extra incentive to build there. Most of this part of the state is in a strategic zone.
Q: What other incentives do you get other than the NYSERDA grants and the property tax exemption?
A: The federal government provides an incentive. It offers up to 30 percent of the build costs; you receive a tax credit for that, and then you turn them in to certain entities who can use tax credits, and you use them in exchange for cash for your project.
Q: Would you consider using sheep to trim the grass around the panels?
A: We are looking into it. The concern we have is that the panels are set at a very specific angle that changes as the sun moves throughout the year, so the sun is coming at the array from a different angle to maximize the amount of sun you get.
With sheep bumping into them, over 20 years the tilt is going to change, and that could end up harming the efficiency of the system. But we are thinking about it. We would consider it, but we’ve just got to make sure that it’s not going to change the economics of the system.
Q: The Cornell system near the Ithaca airport uses sheep to trim the grass. Is there a reason it would work for them but not for you?
A: I don’t know that much about the one at Cornell, but if it’s for the school and not for profit it may not be as focused on the fact that it could affect the tilt of the panels.
They own the system themselves, and the demonstration [of using sheep] may be a higher priority.
Q: I have heard people say that your plan is to sell the system after it’s built. To whom would you sell it?
A: That’s not true. We’re going to be there long time. We’ll have debt holders and potentially equity partners, but our intent is to own the project.
They do get sold — that can’t be ruled out — but right now our intent to own the projects.
Q: How would you then ensure that the system was decommissioned properly?
A: We have a decommissioning plan that has been approved by the town. Independent engineers’ reports and NYSERDA reports are both showing that our plan is adequate for the cost of decommissioning. We’re turning over to the town $60,000 per array, and that’s cash the town has to hold onto.
We are also paying an additional $2,000 per year per array, so the town will have a little over $100,000 on hand for each array after 20 years.
That’s enough money to decommission if for some reason they need to, but it’s a five million dollar system. In the early years it will be enough to power about 400 homes. If we’re not operating it someone would, or someone would scrap the materials because the materials alone are worth enough to take it down.
Q: How will the array having been there affect the land once it’s taken down?
A: I don’t use concrete. We’re just pounding post into the ground, so nothing is being left behind. Making it farmland again in 20 years is doable.
We’re not putting anything in the ground the would poison the ground. There are no toxic chemicals.
This is maybe broadening the definition of farming, but it is farming; we’re just farming the sun. Some people don’t love that argument, but if a guy takes 10 acres for solar and farms the other 60 around it, that’s potentially more productive than the extra 10 acres of hay or whatever they are growing.
I think taking 100 acres out of service to provide 2,000 homes with clean energy is an acceptable tradeoff.
Q: How many acres of solar can Newfield support?
A: We’re looking at five to seven projects, and on average it’s about 10 to 12 acres per project, so we’re rounding it to 100. If there was, for instance, wetland we had to build around, it could mean a 15-acre footprint, but it would be less than 100 acres for those seven projects.
I don’t think 100 acres would materially change the output for hay or grain in the town.
Q: How many temporary construction jobs will the project create?
A: About 70 different people with an average of about 30 on site at any given time during the three to four months of construction, then three to five permanent jobs.
Q: Will you hire locally?
A: That is our focus. We’ve shown the work to Stacy Black from the electrician’s union [The International Brotherhood of Electrical Workers Local 214] and are attempting to work with everybody local.
Q: The PILOT for the project has been a point of contention between the Tompkins County Industrial Development Association, which has been charged with developing standard solar PILOTs across the county, and the Town Board.
Newfield Town Supervisor Jeff Hart is claiming that the town could have gotten a larger sum of money if the Newfield Town Board was allowed to negotiate the PILOT themselves. How do you feel about the IDA’s proposed PILOT agreement?
A: I think the IDA’s PILOT is fair. In terms of the IDA, the number they came up with is based on other states and wind projects and other data points that make the PILOT consistent with other PILOTS for similar projects.
I think the IDA is very important. In Tompkins County there are too many taxing entities for it be efficient. I would have to negotiate a PILOT with all these entities, and it would be a vicious cycle of ‘what did this town get, or this town,’ with everyone trying to get slightly higher PILOTs. [The IDA] creates uniform PILOTs across the county and lets you know where the taxes stand.
Q: How much revenue are the arrays estimated to generate?
A: We’ll generate about $300,000 worth of power per array per year including the expenses incurred by the operations of the system.
Q: What expenses are you accounting for?
A: Customer service; we have to bill the customers, and we have to have support people who can field customer questions. We have insurance, we have operations and we have maintenance, which is basically going out there and checking on the system. We have a need to clean the panels twice a year.
Q: Will Newfield residents get first dibs on the 10 percent discounted energy rates?
A: We guarantee that anyone in Newfield who wants it will get it. There’s plenty of capacity, and they have first choice.
Q: Could you address the concern that some residents have expressed that the arrays’ inverted station will create noise or affect people’s health?
A: The panels collect power, and the inverter station receives power and converts it from DC to AC. In the middle of the array is where the inverter would sit, and we put it there because it gives off a very low hum when it’s working during the day.
You can’t hear it at the edge of the array.
Q: Are you planning to erect a fence and if so will it have barbed wire?
A: We have no intent to use barbed wire. Our substation will be red or black, depending on which blends in better, and if the town says have to put barbed wire up we will, but they have not asked me to put it up. I believe the town would like me to put up a fence, but usually that is a town driven decision.
Q: In which other local communities have you identified potential sites?
A: A project on Podunk Road in Enfield was approved Wednesday, and we’ll be applying for a PILOT on that on April. We’re also looking at Dryden, and there’s also potential in Groton.
Q: If everything goes according to plan, how long before you start construction on the Newfield projects?
A: If we can secure IDA approval we would be ordering the equipment so that when the ground unthaws we can start doing some work. Hopefully we’ll be plugging the system in June.