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To buy or not to buy solar panels

Jun 02, 2023

WINCHESTER - While solar panels will almost assuredly wind up on the roof of the new Lynch Elementary School building, the main question involves how they get there. Does the town buy them outright or does it enter into a Power Purchase Agreement (PPA) with a third-party vendor? If it directly purchases the solar panels, how does it pay for them?

The Select Board did not specifically answer these questions on Monday night. They did learn from Town Counsel Jay Talerman the town can't use American Rescue Plan Act funds to directly purchase the solar panels; however, Select Board member Michael Bettencourt suggested using ARPA money to pay off a capital project and then using the money that would have gone to the capital project for the solar panels (he also suggested using Free Cash and/or borrowing as other potential funding sources).

The board also discussed the timeline and when they need to make a decision. Chair Rich Mucci said he heard the 90 percent design for the project was due at the end of July and the project would go out to bid in September.

Regardless of whether the town purchases or "rents" the solar panels, Mucci said the town could still achieve its goal of reaching net zero in terms of its carbon footprint. If it wants to purchase the panels, member John Fallon asked if the town had a defined funding source.

Mucci said the town could purchase the panels and go to Town Meeting for the money; if Town Meeting votes in the negative, the board could then pivot to a PPA. Bettencourt admitted "not everything lined up perfectly."

He pushed for using ARPA money - in an indirect way- to fund the purchase of the solar panels. The total cost, according to Mucci, would run the town slightly more than $3M with about $200,000 needed for design. Bettencourt suggested using ARPA money for at least the design cost.

Mucci pushed for paying for the project upfront and not borrowing, feeling borrowing would cut into the town's projected savings. Town Manager Beth Rudolph said the town could see a $461,000 savings through a PPA and a $1.54M savings with a direct purchase (both over 25 years); however, borrowing to pay for the direct purchase could leave the town closer to the $461,000 amount.

If the town chooses to purchase the solar panels, Rudolph said they would bid it as part of the Lynch School project. With a PPA, someone other than the architect would design the solar panels.

Vice-chair Anthea Brady said purchasing seems to be the right decision, but questioned how. Select Board member Michelle Prior reminded the board one of the benefits of buying the panels outright involved not having to pay for energy. With a PPA, the town would pay for 50 percent of the energy, according to Sustainability Director Ken Pruitt.

"There are many ways to fund direct ownership," Bettencourt said, even including the potential for any money not used in the Lynch School project.

Mucci, though, disliked the idea of borrowing and hated the idea of using any ARPA funds. He mentioned how the town just lost a DPW truck and many of the town's playgrounds need some TLC.

"We’re good at doing school projects, but we’re bad at doing everything else," he exclaimed.

Prior pushed for purchasing the solar panels by noting how the town would save money every year on energy costs - costs that reside on the municipal side of the budget side since the school department doesn't pay for energy.

Bettencourt suggested the board needed more information, especially when it comes to savings, because the town can reap the benefits of this project for the short- and long-term. Therefore, Mucci tasked Bettencourt, with the assistance of town management and any Select Board members, with putting together a plan for the board's next meeting detailing how the town can pay to purchase the solar panels.

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