CEDAR RAPIDS — Residents along Glass Road NE watched last week as a new two-row solar array went up across the street in the grassy field neighbors used to play ball, runaround and cross-country ski in the winter.
The city had acquired the 2.9-acre property adjacent to its nearby water tower in April from Alliant Energy, and neighbors wondered if housing or apartment buildings were being planned. When they saw solar panels, it was a relief.
“I guess I like it — for selfish reasons,” said Chuck Jones, 62, who lives on Glass Road. “I don’t have to worry about neighbors across the street.”
Upon hearing the deal would be a net positive financially for the city, he connected that to savings for taxpayers. Another bonus, he said.
The city of Cedar Rapids recently kicked off an initiative to power three drinking water booster stations around the city using solar energy. Eagle Point Solar, of Dubuque, is paying for, installing, owning, and maintaining the photovoltaic panel arrays. The city will pay Eagle Point 8.5 cents per kilowatt-hour (kWh) for the electricity, which is roughly two-thirds the 12.25 cents per kWh the city has been paying on average to Alliant.
“It’s a moneymaker for Eagle Point, and it’s a money saver for the city,” said Holly Ruble, an environmental specialist for the city leading the initiative.
Eagle Point, a 38-employee company serving Iowa, Illinois and Wisconsin, installed a 35 kilowatt solar array last week near the water tower at the corner of Glass and Wenig roads NE. The electric hookups and fencing, inspection, and final approval from Alliant are needed before the renewable power station flips on some time in September, said Larry Steffen, vice president of sales for Eagle Point.
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Pallets are on site but work had yet to begin on a 32 kW array at Oklahoma Avenue and Kirkwood Boulevard SW, and installation was ongoing for the 103 kW photovoltaic system on Chandler Street SW near Jefferson High School on Wednesday.
The arrays will provide 85 percent of the electricity at Glass, 60 percent at Chandler and 20 percent at Kirkwood to power the nearby drinking water booster stations, which reamplify the water pressure coming from the water treatment plant before reaching thousands of homes, businesses and fire hydrants.
Ruble and Steffen said the city doesn’t want to generate more than 100 percent of the needed electricity because excess energy would be sold back to Alliant’s grid for less than the 8.5 cents per kWh the city is paying Eagle point.
City and Eagle Point officials said the three arrays combined will save the city $10,100 in the first year. Over the 25 year length of the agreement, Cedar Rapids is projected to save $298,000, Steffen said.
The rate will increase 2.5 percent annually to Eagle Point, which city officials and Eagle Point say is less on average than annual Alliant increases. Alliant increases have not yet been determined.
“We support our customers who want to install solar. A third-party PPA allows customers who aren’t eligible for tax breaks to finance a solar project,” said Mike Wagner, an Alliant spokesman.
Eagle Point will own and maintain the arrays for 25 years, after which ownership will transfer to the city for the market rate, which will be little to no or low cost, Steffen and Ruble said. The arrays have a 45-year life span, Steffen said. Eagle Point has invested $700,000 on solar infrastructure for the city, including the three new arrays and an initial 90 kW array on the roof of the northwest transit garage, 427 Eighth St. NW, last year. The city saved $5,500 in electric costs in the first year at the transit garage, Ruble said.
The project came to life under a power purchase agreement signed by Eagle Point and the city. A 2014 Iowa Supreme Court ruling paved the way for third party power purchase agreements by siding with Eagle Point over Alliant, which sued contending the agreement infringed on its exclusive operating area.
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The agreements allow a non-taxable entity, such as a city, which can’t collect federal or state solar tax credits, to work with third parties to install and finance solar arrays and then pay the third party for the electricity. In this case, Eagle Point has acted as both the installer and financier, Steffen said.
Business has surged for Eagle Point, which formed in 2009, since the ruling. The company completed 40 arrays in its first four years, and 375 arrays in the last three years, Steffen said.
Cedar Rapids will continue to evaluate sites for solar installations, but no others are being planned at this time, Ruble said.
Site selection is more complicated then it may seem, she said. Alliant rates vary by location and season, so the cost-benefit ratio may not be there to install solar, or the arrays may not be an aesthetic fit given the surroundings, such as a neighborhood, said Tariq Baloch, the city water utility plant manager.
“As we are learning about these projects, we are realizing there are a lot of factors that go into selecting a site and feasibility,” he said.
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2016 electricity payments to Alliant:
First year savings: