Savings From Middletown Solar Project Questioned

By guest blogger Linda Baum

Anyone who attended the Middletown Town Committee meeting on June 20th got to see Birdsall Engineering’s presentation of its solar feasibility study. A pdf version of that presentation is now on the town’s website. The Birdsall representative, Jessica Vogel, repeatedly emphasized the 9 cent solar electric rate assumed in Birdsall’s savings analysis, and the Town Committee joined her in repeating the $6.6 million savings achieved over 15 years.

Interestingly, the analysis doesn’t list what assumptions were made in arriving at that savings figure (labeled “cost avoidance” in the study). To know what you’d save, you have to know what you’d otherwise pay, right? So Birdsall would have to have known what the town pays its supplier for the electricity.

I brought up this issue at the town workshop meeting on July 6th. I learned that currently the town pays around 11 cents per kilowatt hour. I played with the Birdsall numbers -- they assume a utility rate of more than 17.5 cents, and rising. I asked about the other assumptions used in the study. Committeeman Settembrino said that the panels are expected to produce 0.5% less electricity each year, but the Birdsall numbers assume that production will drop by only 0.25% each year.

The effect of those inaccuracies is to make it appear that the town will achieve much bigger savings than they actually will. Per Birdsall, a 9 cent per kilowatt hour rate for solar electricity (escalating by 3% each year) will produce savings over 15 years of $6.6 million. Had they used accurate inputs, the savings figure would be closer to $1 million. But if the town is able to get a utility rate closer to the county’s current rate of around 9 or 9.5 cents, there will be no savings at all.

The Town Committee said that they hadn’t checked the numbers in the study and pointed out that Birdsall is a reputable firm. So who am I to question them, right?? They asked what I was getting at. They said, “If the savings are lower, should we not do this? Are you saying we shouldn’t provide tax relief to residents?”

Whoa!!! No, that is not what I’m saying at all. I’m all for solar. Always have been. But I’m also for truth and accuracy. If the assumptions underlying Birdsall’s analysis are inaccurate, then the study does a poor job of assessing feasibility. And wasn‘t that the point? Does that mean we shouldn’t pursue solar? No. It means we should be looking for a much better deal than 9 cents per kwh.

I have to wonder why no one on the Town Committee seemed more concerned that Birdsall’s numbers are wrong. If the town is using the study as a guide to assess offers from developers, then they will be ill-equipped to do so.