St. Clair officials strongly are considering purchasing solar equipment to help power the city instead of trying to work out a lease-purchase agreement.
During Monday’s board of aldermen meeting, Mayor Ron Blum received the council’s approval to review contracts from SunVest Solar Inc. of Pewaukee, Wis., for six solar arrays that would be placed at various locations around the city.
In previous meetings, St. Clair officials have had the same kinds of discussions other area entities have had about putting together a lease-purchase agreement with a solar company. The focus has been on 25-kilowatt arrays that would save the entities in electrical costs while also taking advantage of Ameren Missouri tax rebates that lower operation costs.
But at the end of the day, Blum said he believes a purchase makes more sense than a lease.
“At the end of a lease, there is a clause for sale at fair market value,” Blum said Monday. “But, no one knows what that will be. So, we’ve opted to pursue a purchase.”
If the contract with SunVest comes to fruition, the city would place arrays at city hall, the community center, the sewage treatment plant, at Pump Station 4 and at Well 6. The treatment plant would have two arrays, one totaling 25 kilowatts and the other totaling 18. The others would be 25-kilowatt arrays.
The total cost to the city would be about $97,000, Blum said, “if Ameren allows us all six after the rebates.”
City Administrator Rick Childers told the aldermen that SunVest’s solar panels come with a 25-year warranty. The inverter is warranted for 10 years, he said, and installation is guaranteed for five years.
Both Childers and Blum said the purchase would begin to become profitable during the fifth year of operation.
“My suggestion to the board is to let the city attorney review the contracts,” Blum said. “If nothing is wrong, we’ll sign them and send them off.”
The aldermen unanimously agreed to that suggestion.
No contracts were signed during the meeting.
SunVest’s contract for purchase outlines pricing for the six solar arrays. All of the individual contracts come with a $66,300 price tag, but a $50,000 Ameren rebate comes off the price of each, leaving a balance of $16,300.
The rebates are based on $2 per kilowatt hour.
SunVest earlier had sent city officials a proposal that estimated utility cost savings through its solar energy system.
According to the company, payback time would be 4.6 years for a system with the $2 per-kilowatt-hour rebate. In the fifth year, net savings would be about $7,000. The amount increases to more than $100,000 after 10 years and to about $350,000 after 20 years.
The system description on the proposal is for about 125 kilowatts of useage and 490 solar panels.
In order to qualify for the Ameren Missouri tax rebates, the city must be on board by the end of the year and agree to use solar energy for at least 10 years.
Missouri Solar Apps and Microgrid Solar also have pitched their products to St. Clair officials in recent weeks through lease-purchase agreements.
Missouri Solar Apps already is partnering with R&R Ace Hardware, St. Clair Health Mart Pharmacy and the St. Clair Fire Protection District in providing 25-kilowatt solar arrays to produce the alternative energy source and cut down on utility bills in the process.
Microgrid has inked a contract with the St. Clair R-XIII School District on a 10-year lease purchase agreement that includes six 25-kilowatt solar arrays. That company also is working with the Union and Washington school districts and is negotiating with Pacific.
Lonedell R-XIV is eyeing a deal with StraightUp Solar.