Carroll County government will soon be cutting its electrical costs by 20 percent thanks to a decision to use an alternative and renewable form of energy — the sun.
The Board of Commissioners voted to enter into agreements with a private-sector collaborative to construct solar arrays at Hoods Mill Landfill, Hampstead's wastewater treatment plant and Carroll Community College. The county expects to save about $590,000 annually because of this diversification of its energy portfolio. Carroll currently pays about $2.9 million for its electrical costs through Baltimore Gas and Electric.
"We have a common cause here on reducing the amount of dependence on foreign oil," said Commissioner Richard Weaver, who along with Commissioner Dennis Frazier, R-District 3, first introduced the topic for discussion in February. "The sun's here and it's free."
Representatives of the collaborative say this is possibly the best deal they have ever offered to a local government.
"I don't think we've ever done a deal as good as this," said Daniel Wallace, director of renewable energy systems for Bith Energy, one of three businesses involved in the collaborative. "It's the perfect storm. They have the land, they have an aggressive [Public Works Deputy Director Scott Moser], and if he didn't look at these sites the way he did, we wouldn't have them and we wouldn't be able to get the price as low as we did."
The commissioners voted to enter into agreements with the for-profit collaborative of Bith Energy, Sun Edison and Pivotal Power Solutions, and they also voted to purchase an additional 7,082 megawatt hours of solar energy from an off-site energy grid.
The arrays will take up almost 37 acres, and, combined with the off-site energy, will produce more than 18,000 megawatt hours of energy — more than half of the county's annual usage. Each megawatt hour is equivalent to 1,000 kilowatt hours.
To put it in perspective, this amount of energy is capable of powering about 1,640 U.S. households for an entire year. According to the U.S. Energy Information Administration, the average household used almost 11,000 kilowatt hours in 2013.
The agreements have a fixed rate of 7.7 cents per kilowatt hour over a 20-year period, more than 3 cents less per kilowatt hour than BGE's current rate. The total cost to the county for its annual output from these sources will be about $1.39 million a year, resulting in savings of about $590,000 annually. The total estimated savings over the 20 years is projected to be about $29.5 million.
"A 20-year commitment allows us to amortize the cost to create the lowest fixed rate," said Mike Volpe, sales director for Sun Edison.
The capital costs of the three solar arrays will total about $17.5 million, but the collaborative will be eating all of these costs, Volpe said.
"There are no additional costs, and vandalism is insured by us," he said.
To prevent vandalism, the collaborative usually constructs a fence about 6 feet tall with a double layering of barbed wire, around a facility, but the county's input on the type of fence will be included in the Carroll plans, Wallace said.
When the county was considering properties as possible sites for solar arrays, certain factors were measured, including the abundance of trees and resulting shade, Wallace said. If the shading limited the array's exposure to sunlight, the site was not considered.
"We don't do any grading or tree removal," Wallace said. "It doesn't make sense, at least to me, to remove trees for this kind of thing. The site has to stand on its own."
The collaborative is in the midst of constructing another solar array in West Friendship and is on a site with many similarities to the Hampstead plant site, Wallace said.
The commissioners voted unanimously to approve the sites at Hoods Mill Landfill and Hampstead's plant, but voted 3-1 to approve the Carroll Community College as a site. Commissioner Doug Howard, R-District 5, abstained because he does part-time work for the college at its Business Training and Services center.
Commissioner Richard Rothschild, R-District 4, said he voted against a solar array at the college because it is zoned conservation, which prohibits industrial uses. However, in 2004 a prior board of commissioners passed a law that allows any public land, building or structure to be located in any zoning district as a principle permitted use.
He said he is against any action that grants preferential treatment to governments over the private sector.
"Most people would like to see [government] live by the same rules as they live by," Rothschild said.
The 20-year agreement for each site locks in the fixed 7.7 cents per kilowatt hour rate, which when compared to BGE's current supply and delivery rate results in about $590,000 in savings. Volpe said a significant reason for such a low rate is the availability of a 30 percent federal tax credit, which the county applies for and the collaborative will use. Without this, it would be "without question" impossible to offer such rates, he said. The deadline to apply for this credit is Dec. 31, 2016.
"The economics without the federal tax credits would result in much smaller savings," Volpe said.
Applying for the credit and having solar arrays operational prior to the deadline, however, allows the county to lock in its fixed rate for the 20-year lifetime of the agreement, said Moser, of the Department of Public Works.
When asked if poor weather could affect the solar arrays' output, Volpe said, while bad weather would reduce its production, the collaborative has already factored weather conditions such as rain and snow into its forecasted output.
"What we find over a yearly period and over an extended time frame is the output evens out very well," he said.
BGE's current rates are already very low due to the recent influx of natural gas to the U.S., Volpe said, and historically, BGE's rates have only been lower during one prior year.
"All of the forward forecasts show this value increasing over time, but the solar rate stays the same," he said. "In order to meet our savings, [BGE's prices] would have to go down by 40 percent."
Additional savings result from the county being exempted in the agreement from paying any capital costs. Though the commissioners will sign the power purchasing agreement, the county is not liable for any overhead costs if the federal tax credit is not granted or connection to the grid doesn't come to fruition by the end of 2016, Volpe said.
Once the 20-year agreement expires, the county will have three options: The commissioners can either opt to have the collaborative remove the panels at no cost; the county could purchase the solar arrays; or a new agreement could be negotiated.
Volpe said solar panels have a life expectancy of about 30 years, and each year their efficiency degrades by half a percent.
If the county decides to opt out of the agreement before the 20 years are up, it would have to pay a termination value, which would be about $1 per watt. If, for example, the contract at Carroll Community College, which has a system size of about 800 kilowatts, were terminated, the county would have to pay $800,000, Volpe said.
Howard asked what would happen to the solar arrays if the three companies involved went out of business. Volpe said it would be more than likely that another energy provider would purchase the arrays from the collaborative.
"If [the collaborative] were to go out of business after seven years, you would still have 23 years of life left in the solar panels and you would keep the agreement you are in," Volpe said. "And there would be no additional costs because the capital has already been eaten."
Volpe stressed that while federal tax credits make the county's savings greater, the partnership between Carroll and the collaborative would not be possible if the state's policy did not enable local governments and electrical companies to partner for aggregate metering, a "billing mechanism" that gives credits to customers for any excess power generated and not used, according to a report developed by the Maryland Energy Administration and Maryland Public Service Commission's Net Metering Working Group,
"When a customer generates more electricity than they need, the customer receives bill credits," according to the report. "When the customer needs more electricity than they generate, the customer can use those credits to lower their electricity bills."
More sun on the horizon?
Frazier said "the only thing that upsets me about this is we don't have more places to put solar panels in the county."
County staff looked at other sites as possible locations for a solar array, but several were ruled out due to factors such as the amount of shading in the area. At least one other site, Salt Box Park off of Gillis Falls Road, proved to be a plausible location, Moser said.
During a Planning and Zoning Commission meeting Tuesday, the commission was asked to find each of these sites as consistent with land-use designations in regard to solar panel installation as outlined in Carroll's 2014 Master Plan. Because the master plan is mostly silent on the use of solar panels, planning staff said it would be more accurate to view the use of arrays on these four sites as not inconsistent with the plan as opposed to consistent or inconsistent.
The commission said not enough information had been provided for the Gillis Falls Road property to make a ruling.
"The idea of putting solar panels in areas we aren't otherwise using is terrific, but [county staff is] not really asking us that and I feel the Gillis Falls site needs more analysis," Chairman Alec Yeo said.
While the commissioners wait for this information to be provided and the commission to make a ruling, the next step will be to install solar panels on county-owned rooftops, Frazier said.
"Instead of leasing it we would own these panels and at least partially run the buildings that are attached to it," Frazier said.
Weaver agreed with Frazier, and said this is a step for Carroll in the right direction.
"It's our responsibility to move the county forward and solar power is part of that," Weaver said. "Things are changing and changing fast and we have to change with it."
Hoods Mill Landfill:
Size: 25 acres
Capital Costs: $12 million
Estimated energy to be generated annually: 7,082 megawatt hours
Percentage of Carroll's total electric usage: about 22 percent
Cost to county at 7.7 cents per kwh: $545,314
Savings versus BGE at 11 cents per kwh: $233,706
Hampstead Wastewater Treatment Plant:
Size: 8 acres
Capital Costs: $4 million
Estimated energy to be generated annually: 2,778 megawatt hours
Percentage of Carroll's total electric usage: about 9 percent
Cost to county at 7.7 cents per kwh: $213,906
Savings versus BGE at 11 cents per kwh: $91,674
Carroll Community College:
Size: 3.62 acres
Capital Costs: $1.5 million
Estimated energy to be generated annually: 1,095 megawatt hours
Percentage of Carroll's total electric usage: about 3.3 percent
Cost to county at 7.7 cents per kwh: $84,315
Savings versus BGE at 11 cents per kwh: $36,135