What bond can Brandon voters approve that will save the taxpayers over $1,000,000 in taxes and pay for itself?
The proposed solar project should pay off the loan needed to build it in 10 years with a positive cash flow and save taxpayers substantially for another 30-plus years.
Here is some background…
The Brandon Energy Committee, with the support of Aegis Solar, studied the GMP bills for the calendar year of 2022 to determine the size of a solar system that would meet the needs of the town. We concluded that there were $30,000 in charges available for offset by solar credits from a new system after taking into account the town’s existing Green Lantern contract which provides a 12% discount on a large portion of the town’s electric accounts.
The town will benefit from a solar system that generates $30,000 in solar credits as of last year and the town’s use is increasing with the recent addition of heat pumps at the town hall and police station and as electric vehicles may be purchased to replace current internal-combustion-powered vehicles.
A 150kW system generating $35,500 in annual solar credits is the most cost-effective approach to meeting this need. The Fire District has agreed to accept an allocation of any solar credits generated in excess of what the town needs in exchange for a 10% discount on the actual credits allocated.
The bond request is for $500,000, though the actual need for borrowing is far less.
The low bidder (at $468,500) indicates that the construction costs are fixed and that the permitting should be fairly straightforward at this site, as it was at the adjacent Green Lantern project site. The construction can be accomplished this year.
This project qualifies for the new federal Inflation Reduction Act cash rebate for nonprofits and municipalities that will reduce funding needs by 30% or $148,500. The Selectboard allocated $60,000 of ARPA funds for this project, and needs up to $10,000 for non-construction costs. Thus, borrowing should be under $280,000. The Vermont Bond Bank has just set up a new program offering 2% 10-year loans for such projects that Brandon qualifies for. This will result in payments of under $31,000 a year for ten years.
The $35,500 in savings from the solar credits will be reduced by operating expenses starting at about $4,650 and growing form there, (including the discount for allocations to the Fire District). The solar credit savings have gone up at least 2% a year on average over the last decade, and costs will likely increase faster. In addition, when productivity degradation is factored in, the cash flow from the project will grow over the life of the project.
Over the 40-year life of the project, the system is projected to save taxpayers over $1,000,000, (optimistically $1,300,000) after paying off the loan.
Two of the contractors bidding on the project consider decommissioning costs to be an irrelevant consideration, as the panels are expected to be producing at over 80% of their capacity in 40 years. The panels are far stronger than glass and have a very long life. The system will still be producing a strong positive cash flow beyond the 40-year projection we have made.
A third contractor suggested decommissioning costs “may be required” and determined that $25,000 would be the likely cost in 40 years. This number is consistent with the New York standards for estimating decommissioning costs. Extending the lease contract for a year will very likely cover this cost, though the system more likely could be sold just like a used vehicle, as it will have additional productive useful life.
We encourage your support in one of several ways. Please ask questions, raise concerns, and let’s get to what’s best for the town.
We see this as a great opportunity to save tax dollars…a result rarely achievable!!
Jim Emerson
Brandon Energy Committee brandonenergycommittee@gmail.com
