How Cities & Towns Are Lowering Operating Expenses with Solar

Published November 18, 2019

How Cities & Towns Are Lowering Operating Expenses with Solar

DATE PUBLISHED: November 18, 2019
Category: Blog Article

For City and Town managers, treasurers and finance committees, the annual budgeting cycle is high-pressure to say the least. And it never seems to end. But there is an easy way to inject something positive into the budgeting process, and to bring some welcome relief to the budgeting table. Solar energy.

Solar is a simple and fast way for you to reduce your operating expenses and generate new revenue, with no upfront capital expenditure and no competitive RFP. Best of all, clean solar energy is non-controversial and an easy sell at Town Meeting.

Why Cities & Towns Should Care About Electric Bills

Solect Energy has installed solar energy systems for dozens of New England municipalities, so we’re well aware that electricity generally represents a small percentage of your overall operating expenses, sometimes less than a percent.

But the actual money you’re paying to the utility is still considerable – and can be lowered with solar.

In our experience, municipal customers who go solar see anywhere from a 10% to 60% reduction in their electricity prices. If you apply a middle-of-the-road figure of 30% to an annual electricity budget of $303,465 – which is the actual budget for an average sized town in Massachusetts (based on population) -- that comes out to $91,000 in annual savings for that community.

When you go solar using a Power Purchase Agreement, you can secure these savings without a capital purchase. No money out of pocket, and no maintenance costs…just the savings.

Regardless of your town’s size, you can free tens of thousands of dollars a year by slashing your electric bills with solar.



Examples of Municipal Solar Savings

Actual savings vary based on factors that start with your utility, because each utility offers slightly different incentives. The size of your solar energy system, the location of the system (“on-site” or “off-site”), and the class of service at your utility meter also factor into how much you save.

But here are some real-life examples to whet your appetite:

  • Since installing a solar energy system on City Hall, the City of Haverhill is saving $22,000 a year on its annual energy cost, which was $105,500 before solar. They cut their electricity expense by more than 20%.
  • The Medford DPW is saving $11,000 a year with solar, which comes out to at least $220,000 over the life of the 20-year agreement. That assumes utility rates don’t change. But we all know they will probably go up, in which case the value of the solar energy generated by the town becomes even greater as time goes on.

If $11,000 or $22,000 in found money a year sounds appealing to you, read on, or contact Solect Energy today to learn what solar can save your community. 

Note: these savings are for just one site for each city.  When you bundle multiple project sites, as many towns do, the savings multiply and add up, year after year.


It’s Worth the Time

Again, we understand that municipal budgeting is a labyrinthian process and sometimes the overriding desire is to simply get through it with a somewhat workable budget.

You have to fund payroll, benefits, retirements, day-to-day operations, capital investments, service debt obligations and maybe even some legacy costs. You have to factor in fluctuating property tax rates and revenue. You have to deal with shifting priorities and ever-changing requirements that take precedence over funding the optional programs and activities list.

With all that going on, it can be hard to find time to make a case for new projects, even ones like solar that pay for themselves, cut operating expenses, and generate new revenue.  

But keep your eye on the prize. Join the scores of cities and towns in the region that have gone solar, and are now sizing up additional properties and the savings opportunities ahead.

Let us put you in touch with some of our municipal customers who can attest that the process is simple, and the savings are real and substantial.


How Municipal Solar Works

Solect is able to help cities and towns go solar with no additional competitive bid process and no upfront capital because of our partnership with the largest nonprofit energy-buying consortium in New England, PowerOptions. PowerOptions has helped hundreds of New England cities, towns, schools, state agencies and nonprofits reduce their operating expenses with energy saving programs and contracts.

Together, Solect and PowerOptions have helped more than 60 municipalities and organizations profit with clean power, including the City of Haverhill, which installed solar on its Maintenance Facility as well as on City Hall; and the Town of Lunenburg, which had us put solar panels on both the High School and the DPW Highway Facility.

The benefits of the Solect-PowerOptions partnership are:

  1. Lower electricity rates due to PowerOption’s competitive bid process that secures very competitive energy rates for its members
  2. No competitive RFP process is required of you, because PowerOptions has already negotiated on your behalf; this ability for you to “skip the bid” is spelled out in state law.
  3. No upfront capital is required from you. Your only financial commitment is paying your lower monthly electric bills and redirecting the electricity savings to more important budget items.



Solect Makes it Easy

No capital is required for you to go solar because Solect finances your project. You enter into a Power Purchase Agreement (PPA) to buy the solar generated on your roof or in your parking lot, at a much lower price that what the utility delivers.

Solect wears many other hats as well, which makes your role in going solar very simple and straightforward. In addition to financing your solar energy project, we do the engineering and installation. We then operate and maintain the system. You have no operational or maintenance responsibility.

Under the Solect PPA, we also monitor your system’s performance long-term, to make sure it’s delivering maximum benefit to you. And should an issue arise related to your electric bill, we’ll address it with the utility on your behalf.


PILOT Revenue

There’s some icing on this already delicious cake. Solect’s contract with your city or town will include Payments in Lieu of Taxes (PILOT) to compensate your community for the use of your public property, i.e. your roof, parking area or land, to support our solar panels and related equipment.

These PILOT payments provide a steady, predictable revenue stream for your city or town. Payments are made quarterly, starting after the system is turned on, and generally amount to several thousand dollars a year in new revenue for your community.


Get Started

You may think you don’t have time to save with solar. You may think as a non-tax-paying entity, you can’t access the value of government tax benefits for solar. But with Solect as your Solar provider, you can.

Remember, the tiny line item for electricity in your budget equates to tens of thousands of dollars you can put to better use, to better serve your community. At the same time, you’ll be acting as a role model and steward of the environment.

Don’t let ongoing budgeting chores stop you from taking advantage of the opportunity and extra funds waiting for you. Contact Solect today for your customized proposal, or if you have questions and want to learn more.

And let solar make budgeting fun again!