Solar project narrowly gets OK in Rogers

Mayor breaks tie in council vote

ROGERS — City Council members on Wednesday narrowly approved a $12.2 million solar panel project, putting the city on the path to using 100% renewable energy, according to local officials.

Council members Mandy Brashear, Marge Wolf, April Legere and Betsy Reithemeyer voted in favor of the solar project, while Mark Kruger, Gary Townzen, Clay Kendall and Barney Hayes voted against it. Mayor Greg Hines provided the tie- breaking vote.

The 4.5-megawatt solar panels will be installed over the next 18 months at the city recycling center, Fire Station No. 8 and the Police Department, said David Hook, facilities development manager. The city’s energy bills will be lowered by 1 watt of energy for every watt of electricity generated by the panels, he said.

The council hired Johnson Controls of Little Rock in April to do an energy audit on facilities. The company recommended an energy savings project and the solar panels.

The $ 5 million energy savings project was unanimously approved at the council’s Oct. 27 meeting, but council members voted 7-1 to table the solar project to give Kendall time to calculate whether the solar panels would provide a good return on investment. Kendall is a certified public accountant and partner at WealthPath Financial Advisers.

Reithemeyer voted against tabling the measure, saying she wanted to see the project move forward immediately. Both projects will be paid out of the city’s reserves, Hook said. The city has approximately $47 million in reserves, according to Finance Director Casey Wilhelm. The city will save about $1 million in interest by self-financing the energy savings project and $ 3 million in interest by self-financing the solar project, she said.

Johnson Controls has guaranteed both projects will largely pay for themselves in 20 years, Hook said. If the improvements don’t meet the guaranteed numbers the company has set, it will write a check for the difference, he said.

The company’s numbers show the city will save $12.95 million in energy costs over the 30-year life of the solar panels, covering the initial cost of $12.2 million, according to Kendall’s calculations. Other cities have generated 15% to 40% more electricity than expected and realized even more savings, Hook said.

Kendall said because of inflation and other factors, a dollar won’t be worth the same in 30 years as it is today. He calculated the net present value, or current worth of a series of cash flows over time, of the $12.2 million investment over 30 years using Johnson Controls’ numbers. He found the city could actually lose $4.16 million on the project.

He shared a spreadsheet with the council detailing the performance of the investment if the panels were to produce 20% more than expected, or if the solar panels were to last for 36 years.

The panels would have to generate 35% more electricity than expected and last for 36 years to begin seeing a positive return on the investment, considering net present value, according to Kendall’s calculations.

Kendall said he loved the idea of the project but didn’t think he could vote for it because he doesn’t believe it is a wise investment for taxpayers.

Kruger said he appreciated the time Kendall spent on the calculations and said he trusted his judgment. Hayes also commended Kendall and city staff members for their efforts and said he was sad the numbers didn’t come back any better.

“If electrical rates go up substantially, we may be wishing we had done this,” Reithemeyer said. “If they don’t, we don’t know.”

It would speak well of Rogers to be the first city in Arkansas to become energy neutral, she said. Not every decision has to be strictly financial, but it does need to be a component, she said.

Brashear asked if it is realistic to expect the solar panels to be completely cost neutral over a period of time, considering the benefits of bringing renewable energy to the city.

Legere said she respects the financial research.

“I do feel we owe something to our children to ensure we leave them an environment and a home that is livable, and I think this is the first step,” she said.

Hines said he wanted to bring the issue before the council without any degree of advocacy to let them weigh the issues of capital outlay and return on investment against the responsibility to be good stewards of the environment and set an example to the business community.

Hines said he made the tie- breaking vote because he felt there was enough interest from the council in making an investment in the solar panels even though the return on investment might not be great, unless it greatly outperforms projections.

“Sometimes you get an opportunity to do big things, and this is one of those,” Hines said.