City approves solar deal worth $900,000 annually

City approves solar deal worth $900,000 annually

PAWTUCKET – A new net metering agreement between the city and Southern Sky Renewable Energy will mean a $900,000 aggregate benefit to taxpayers and comes with no risk, says Ralph Palumbo, president of the Rhode Island-based company.

The City Council last week voted unanimously to approve the 25-year deal, which will allow Pawtucket to “get the benefit pay later, and you don’t make any investment behind it,” said Palumbo.

This is a simple concept, said Councilor John Barry III, as Pawtucket will receive discounted solar power for its public buildings for the next 25 years.

Nearby Cumberland, which is also part of this arrangement, approved its portion of the deal in early April. Cumberland will receive $358,000 in annual savings.

Palumbo told Cumberland officials that the deal is essentially “free money” for that town, as his company is “doing all the work, taking all the risks.”

Power generated at an off-site solar installation in Hopkinton will feed directly into the power distribution system and the city will receive a credit on its National Grid bill equal to the amount of power produced in Hopkinton multiplied by a net metering credit rate. Pawtucket will pay back 65 percent of the credit it receives and retain the remaining 35 percent.

Pawtucket will receive $10,000 in annual scholarship money from Southern Sky to fund scholarships for graduating students at local high schools, said Palumbo.

City officials first announced the net metering credit program in January.

“The city is always looking for ways to save taxpayers money. The agreement with (Southern Sky) will be one way to do so over the next two and a half decades,” said Mayor Donald Grebien at the time. This long-term solution to using power will save tens of millions of dollars while reducing climate-related risk and dependence on fossil fuels through an approach that’s friendly to the environment, he said.

According to the Rhode Island Office of Energy Resources website, “Net metering allows customers with eligible renewable energy systems to receive bill credits for all power generated up to 125 percent of the on-site consumption during a billing period. Public entities (municipal, state, quasi-state) are allowed to enter into virtual net metering arrangements.

Nine firms originally responded to Pawtucket’s request for proposals. Southern Sky demonstrated the greatest readiness and provided the largest discount rate, according to officials.