The St. Clair R-XIII School District Board of Education extended its lease with Microgrid Solar for an additional four years in an effort to ensure Ameren Missouri tax rebates and decided to spend additional money to use American-made products.
The decisions were made during the school board’s Nov. 14 meeting in the central office.
In October, board members opted to use Microgrid Solar and six 25-kilowatt arrays to help provide power to the district through the use of solar energy. In that original six-year pact, each array came with an annual $2,000 price tag for five years, and the sixth year served as a transitional year for Microgrid to transfer ownership of the systems to the school district.
At that time, lease language said ownership of the arrays would be transferred to R-XIII at fair market value during the sixth year of the lease, but no price tag on what that may be was included.
However, it was discovered Ameren requires entities to use solar power for a minimum of 10 years to qualify for tax rebates.
“I felt we needed to cover the other four years and then sustain the equipment ourselves,” St. Clair Superintendent Mike Murphy told board members. “If this doesn’t work, then I would choose to do something else.”
Information from Ameren states that the purpose of the solar rebate rider is to implement the solar rebate “and to establish the terms, conditions and procedures which the company will rely on in accepting rebate applications and authorizing rebate payments to eligible participants for a qualifying solar electric system.”
One of the conditions states, “The customer must declare the installed system will remain in place on the account holder’s premise for the duration of its useful life which shall be deemed to be a minimum of 10 years.”
The Lonedell R-XIV School District was the first entity to question the 10-year requirement. When its board met earlier this month, it delayed making a decision until more information could be gathered.
The Union school district already has inked a six-year lease purchase agreement with Microgrid, and discussions between the company and the city of St. Clair are ongoing.
The additional four years of the lease purchase agreement will cost R-XIII $3,000 annually, or $500 per array, during the additional four-year time frame.
“My concern was that in our earlier meeting we agreed to approve a six-year window of time, and if we didn’t like it (solar arrays), we could remove it,” Murphy said. “With what Ameren requires, I wanted to make sure we had 10 years of coverage.”
After the 10 years, the school district still could opt to use the arrays and purchase them from Microgrid at fair market value. Microgrid verbally has stated that value could be $1, but that language is not stated in the lease purchase agreement.
The arrays are expected to retain up to 80 percent of their efficiency value for 25 years. During the lease period, the efficiency is guaranteed at 95 percent.
As far as the board deciding to use American made solar panels, Murphy said that request tacks on an additional $4,000 per array or $24,000 total.
“If we decide to go American made, it will reduce our savings,” Murphy told board members. “I struggle to recommend an additional $4,000 for an American-made product. There is little difference in their performance.”
However, board members were quick to say they believed using American products was the way to go.
“If it comes down to keeping Americans working instead of someone else, I’m all for it,” Dave Hinson said.
“I’d like to keep as much of it as close to home as possible,” Mike Drewel said.
The votes were unanimous to extend the Microgrid lease to 10 years and to go with the American-made solar arrays.
The American solar panels have a 25-year warranty. The inverted meters that will be used carry a 10-year warranty.
Information from Microgrid stated the non-American arrays would be built in China.
St. Clair Elementary School will house two arrays. One each will be placed on the roofs of Edgar Murray, St. Clair Junior High, St. Clair High School and the Franklin County Cooperative building.
According to information from Microgrid Solar, cumulative energy savings for the R-XIII school district using the six solar arrays for 10 years is estimated to be $157,711. After 25 years, that figure is expected to be $752,934.
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 — if the district decided to keep using the system — would be R-XIII’s responsibility.
The key component of the lease agreement is taking advantage of Ameren Missouri tax credits, which are now $2 per kilowatt, Microgrid Solar representative Troy Libbra said. He also has informed potential customers 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.
“Ameren’s program is changing,” Libbra has 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.”
US Bank is helping Microgrid with the tax credit process.