CHAPEL HILL – We might see more solar energy projects being developed in Chapel Hill over the next several years, which could prove to be a lucrative investment for the Town.
The Chapel Hill Town Council said at a meeting Monday evening that it is on board to explore solar energy projects on town-owned facilities.
Town staff said Chapel Hill is not eligible for state and federal grant money in this area, so it’s not feasible for the town to pursue these projects alone. However, private groups could propose partnerships and lease agreements to put solar panels on town property.
John Richardson, Chapel Hill’s Sustainability Officer, said North Carolina is number two in the country for solar installations, trailing behind California. He said potential investors have taken notice of the Tar Heel State.
The pace of developer investment in solar initiatives is also expected to increase in 2014.
“It is becoming pretty clear that North Carolina is becoming a national leader for solar installations,” Richardson said. “One explanation is the fact that a lot of these are supported by a good tax credit structure.”
How It Works
An investor group would request to lease an underutilized municipal space, such as a rooftop. The Council would then approve a 20-year lease to the owner group, and it would install the solar panels, Richardson explained.
“You have no revenue or cash flow through the first six years, but as soon as that ownership flips, you then see greater revenue potential, greater cash flow from that because you then have access at that point; you have access and control of the electricity,” Richardson said.
Under the “Host-To-Own’ Model, after about five to seven years, the lease contract would allow the Town to buy back the solar installation equipment. The Town could eventually take ownership, and at that point it would have access to the benefits of solar generation.
“That would be in one of two forms: either as an offset—so if you had a solar installation on the roof of a building, of course the building has an existing electricity demand— you can offset that demand through solar generation. Or, you could potentially sell that electricity generation back to the grid.”
The “Host-To-Own” Model was used at the Carrboro Farmers’ Market through partnerships with the Carrboro Solar Community Initiative, a handful of local investors, and the Appalachian Institute for Renewable Energy, or AIRE.
Town staff have begun a feasibility study for the “Host-To-Own” model and how it could work in Chapel Hill. They are working with AIRE as a consultant and will receive feedback from the study in February.
Homestead Aquatic Center and Other Projects
The Homestead Aquatic Center is also being considered as a potential solar energy site. Richardson said it was designed for solar panel use with an appropriate roof design that faces southward.
It is estimated that the Aquatic Center could produce 100 kilowatts of power, which power would about 10 to 20 homes for one year. Installing the solar energy panels would cost about $350,000.
Richardson said his department is exploring the idea of installing a solar panel structure above the Transit Facilities Parking Lot. It estimated that it could generate 1.1 megawatts of electricity, which would power 150-200 homes for one year.
This idea sparked the approval of Chapel Hill Mayor Mark Kleinschmidt.
“If you see that and don’t go, ‘Wow!’ I don’t know what is going on in your head right now,” Kleinschmidt said. “The whole idea that we could take an asset like that, which is just collecting oil drippings from buses, and turn it into something that is generating energy at that level is just astounding.”
With the Council’s approval, Town Manager Roger Stancil has been authorized to further investigate solar energy options, as well as potential investors and project sites.