The city of St. Clair seriously is considering jumping on the solar energy bandwagon and potentially saving thousands of dollars in utility costs annually in the process.
Last week, Troy Libbra, a representative from Microgrid Solar, made city hall his latest stop in what has become a whirlwind tour of local entities in the past couple of weeks.
He arrived in St. Clair directly from Lonedell School, where he had pitched his product to the board of education there. He also is working on a lease-purchase agreement with the St. Clair R-XIII School District and has made presentations elsewhere in Franklin County.
City Administrator Rick Childers said he contacted Libbra after he found out the St. Clair school district was going with Microgrid for its solar conversion. After Libbra’s presentation, the aldermen voted for Childers to continue to work with the company and work on a proposal to get St. Clair in line to use the energy alternative.
The city did not vote on a lease purchase contract itself.
“It looks to me like we could save money from Day One, and the savings over time would be substantial,” Ward 1 Alderman Nathan Tate said at the end of the presentation. “I think it would almost be irresponsible for us not to move forward with this.”
The city’s potential lease agreement is identical to the one approved by the St. Clair school board during its October meeting. It would be for six years, but the city would only have to make payments on the 25-kilowatt array for five years.
After that, Microgrid would donate the solar unit to the city to continue to use.
Under the terms of the agreement, Microgrid would handle all installation and maintenance of the system during the lease time frame. After it expires, any maintenance or repairs would be the city’s responsibility.
Just like the deal with the school district, the city’s lease agreement would take advantage of Ameren Missouri tax credits, which are now $2 per kilowatt, Libbra said. He also informed city leaders that Ameren is trying to “tick down” the kilowatt rebate rate, maybe to $1.50 per unit.
If that occurs, Libbra said, Microgrid would have to renegotiate the terms of its lease agreements with the city, school district and other entities.
“Ameren’s program is changing,” Libbra said. “The incentives may be slowly going away. ... There is some uncertainty, but we feel very good about the chances of continuing under the $2-a-watt rebate.
“We’re encouraging people to take advantage of it before it could go away.”
However, the company consultant emphasized that there are no guarantees.
“Ameren’s (situation) is a red flag, but we’re still moving forward,” Libbra said. “Our challenge and goal is to get as many people qualified as possible (for the solar program with the utility rebate).”
A ruling by the Missouri Public Service Commission will determine what future Ameren tax credits will be. Libbra said the utility company believes it has satisfied its rebate quota this year, and is requesting the amount be lowered.
Libbra said there was no specific time line as to when the PSC will make a decision. The application deadline to take advantage of the tax credits is the end of the year.
The Ameren situation was a cause for concern among the aldermen, Childers and Mayor Ron Blum, but not enough to keep the board from making the motion.
“My understanding, with the rebate program, we should get in line if we’re interested,” Blum said. “It wouldn’t hurt from my perspective to make the motion on the proposal presented and if anything changes to re-evaluate it.”
US Bank is helping Microgrid with the tax credit process. Because he works for an area US Bank branch, Ward 2 Alderman Travis Dierker abstained from voting on the motion.
The proposal on the city’s table calls for a $2,000 annual payment for five years for each 25-kilowatt array, starting whenever the unit would be installed and in use, which probably would be in late spring 2014. The company guarantees a 95 percent performance guarantee for the duration of the contract.
During the sixth year, ownership of the array would be transferred to St. Clair. From then on, the city would be responsible for it.
According to figures presented by Libbra, over the six years of the lease, the city is projected to save about $13,000 in utility costs. Over 25 years, the savings could top $142,000.
The projections take into account a 5 percent annual utility escalator.
Libbra also said over 25 years, the city should expect less than a 20 percent degradation in efficiency.
Libbra said the application process typically takes 30 to 90 days.
Microgrid also will take a look to see if the city’s wastewater treatment plant facility on Happy Sac Road could accommodate a solar array on its roof. If it can, the lease agreement could include that building with similar terms and savings as city hall.