Louisville approves purchase of $1.3 million of solar panels

Dec 22 - McClatchy-Tribune Regional News - John Aguilar Daily Camera, Boulder, Colo.

City leaders approved a $1.3 million solar power project Tuesday that has some in town wondering if taxpayers will ever get their money's worth from the deal.

By a 5-to-2 vote, the Louisville City Council gave the go-ahead for the purchase of solar panels to help power operations at the city's wastewater treatment plant and two water treatment plants.

The panels -- estimated to put out 147,000 kilowatt-hours a year and occupy 10,000- to 15,000-square-feet at each site -- would provide about 7 percent of the city government's electrical needs.

The solar project represents the city's first foray into the arena of green energy in any of its buildings.

"This really is an investment that protects taxpayers from the upward cost of energy in the future," said Councilman Bob Muckle, minutes before voting in favor of the project.

The real cost to the city won't be $1.3 million since it plans to get about $1 million in Xcel Energy rebates and tax incentives.

For some, though, the cost of the plan is still too high, the technology too untested and the return on investment too meager.

"Without a return on investment, it's a gesture, not an investment," said Michael Menaker, a long-time Louisville resident who has been vocal on the issue. "It's a feel-good move, not a do-good move."

Menaker said the main problem is that by the city's own estimates, the break-even date on Louisville's investment in the three sets of solar panels won't come for 19 years, when compared to simply continuing to pay Xcel for electrical power.

Photovoltaic cell technology is developing so quickly, Menaker said, that it doesn't make sense for Louisville to lock itself into a soon-to-be obsolete system that will cost thousands of dollars a year to maintain.

He cited language in a city staff report that states that "the risks associated with this project and the time frame for benefits to accrue creates significant uncertainty."

While he supports moving toward renewable sources of energy, Menaker said the numbers have to add up, especially when it's taxpayers' money at stake.

"I am opposed to a 20-year break-even with no tangible benefits to the people of Louisville," he said. "This particular deal does not work."

Councilman Hank Dalton is also leery of the proposal.

He said if the efficiencies of solar technology improve markedly over the next few years, Louisville will be stuck with equipment that won't provide financial benefits for nearly two decades.

"The dollar savings by using solar energy to power part of our water treatment facility is speculative rather than actual," Dalton said. "If we were a business, I don't think we would be doing this with more than a seven- to 10-year horizon."

But Mayor Chuck Sisk said Louisville is not a business. While the city has to take actions in a fiscally responsible manner, the mayor said Louisville has a duty to embrace clean energy -- especially since it encourages its residents to do the same.

"Government has to lead by example," said Sisk, who voted in favor of the project. "And this is a case where citizens have advocated for this."

Waiting for technology to reach a state of perfection, he said, would result in nothing ever getting done.

The mayor said there is no doubt a risk investing $1.3 million in solar technology, but he called it a "calculated risk." And the risk is further reduced because of rebates available for installing solar power systems, he said.

Tom Phare, Louisville's public works director, said Xcel will rebate the city $600,000 in a lump-sum payment and then pay the city an estimated $24,000 a year in renewable energy credits as a reward for reducing loads on the electrical grid.

Another $400,000 in federal tax incentives -- disbursed through the system's designer and installer, Louisville-based Bella Energy -- will help pay down more of the city's capital costs, Phare said.

"We've put together what we think is the most cost-effective proposal," he said.

But Menaker said if electrical prices decrease in future years, the city's break-even on the solar panels will extend beyond 20 years. And that's too much to ask his fellow residents, he said, especially after the city asked them to vote in favor of a use tax in November. The measure passed.

"This is not the time," Menaker said. "Hopefully that time will come sooner than later."