Esky looking at solar energy system

ESCANABA — After looking at the pros and cons of solar energy for years, Escanaba is considering two alternative sites for developing a sun-powered system that would help reduce power costs for all city customers.

Creation of an Escanaba Solar Project on property at the Delta County Airport is among the agenda items during a special meeting of the Escanaba City Council and the Delta County Commission scheduled for 4 p.m. on May 31 at city hall.

The possibility of developing a solar energy system was recently discussed at length during the Electrical Advisory Committee’s (EAC) meeting last month. EAC member Glendon Brown, who has a solar energy system on his boat, has extensively researched the topic and presented an update on April 12.

“Utility-scale solar generation within the Escanaba electric system is expected to benefit all the electric customers — residential, commercial and large power users — by lowering costs for the entire system,” stated Brown.

A large-scale utility solar generation system would be a one-time investment powered by free sunshine for more than 25 years, he explained.

Maintenance costs would include mowing grass around the system, monitoring equipment, cleaning the panel’s exterior surfaces when necessary, and replacing defective components beyond warranties, he said, noting inverters typically have a 10-year warranty.

Brown also noted the cost to install large solar generation facilities is declining, making solar energy a more attractive cost-competitive electric generation source.

“A one-time investment in a utility-scale solar generation capacity essentially stabilizes or fixes future electric costs for 25 or more years into the future,” he said.

Brown bases his findings on data from the Escanaba airport weather station and the National Renewable Energy Laboratory website.

Regarding specific cost evaluations, Brown said the initial investment of a solar energy system would equate to $1.70 per watt that would provide electricity at a fixed rate of under 7 cents per kilowatt for 25 years, compared to a current rate of more than 9 cents per kilowatt which will increase over the years.

Installation costs for a one megawatt solar facility is expected to not exceed $1.70 per watt in 2018 and with an energy-optimization rebate of $75 per panel, the installation cost is expected to not exceed $1.46 per watt.

“That gets you down to very attractive numbers,” Brown told EAC members.

“An Energy Optimization rebate or a 30-percent Federal Investment Tax Credit can reduce the installation costs further, to provide the justification for an Escanaba resident or business owner to invest in the Escanaba Solar Project,” he added.

Brown also explained that a solar energy system would avoid other higher energy costs because each kilowatt of local solar generation eliminates the purchase of one kilowatt of energy from the city’s energy supplier.

The city has a firm contract for energy pricing through the fiscal year 2023-24; beyond that, energy costs are expected to remain relatively unchanged, mostly depending on natural gas prices, he said.

Another savings with a solar energy system would be avoided capacity costs, said Brown.

He explained the city is required by the Midcontinent Independent System Operator (MISO) to pay for an energy reserve above the city’s peak energy load in the event the city ever needs more power beyond its highest energy use.

Escanaba’s peak energy load is 28 megawatts, typically reached during the summer. The city, as a municipal utility, is required to have local generation or purchase generation capacity that meets the annual peak loads plus excess capacity reserves of at least 14 percent to bring Escanaba’s power capacity up to 32 megawatts. These capacity costs are included in customer rates.

By producing solar energy for itself, the city could apply the local generation to its generation capacity requirements and lower customer rates, said Brown.

Brown also explained the city’s annual energy peaks occur when local solar generation could reduce peak loads — during the months of June through September with 60 percent of the annual peak loads in July.

In addition to savings from avoided energy costs and avoided capacity costs, a local solar energy system would also avoid some transmission costs which relate to peak loads and avoid some renewable energy costs required by the state.

In December 2016, Michigan passed new energy legislation extending and increasing the renewable energy standards for power being produced from a renewable resource from 10 percent to 15 percent by 2021.

Brown concluded that because the 25-year cost of solar generation is less than the above avoided costs, a solar energy system based in Escanaba would lower the cost of electricity for all the city’s customers.

“It looks encouraging,” he added.

In a separate report to the EAC, Brown presented more encouraging information about the city’s maximum peak loads which occur in July and August between 3-5 p.m. on weekdays.

Brown said this data provides significant insight into the city possibly developing a time-of-day electric rate structure for residential and business commercial customers.

Some communities offer this to electric customers who are charged a lower rate for shifting times they use electricity for specific purposes such as running a dishwasher or clothes dryer from 10 p.m. to 10 a.m. on weekdays, said Brown.

“It’s something to look at in the future,” he said, noting a time-of-day electric rate structure would lower capacity costs for the city.

Brown said consumers can reduce costs for the city now by shifting electric use, where possible, from on-peak hours between 10 a.m. to 10 p.m. on weekdays to off-peak hours all day on Saturdays and Sundays and between 10 p.m. and 10 a.m. on weekdays.

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Jenny Lancour, (906) 786-2021, ext. 143, jlancour@dailypress.net


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