CLAREMONT — The City Council agreed to lease four parcels of unused land on River Road to a solar project Wednesday. The project is expected to yield approximately $3 million in total city revenue over 20 years and may provide low-cost energy to municipal buildings.
On Wednesday the council held a public hearing for the Steel Mill Solar Project, which Aaron Svedlow, president of North Light Energy, first presented on April 24. Svedlow proposed leasing two city lots, one owned by the city and one privately owned, for a solar installation that will generate 10 MW of electricity.
In lieu of paying taxes on the property, the solar investors will pay the city an annual amount of $10,000 per MW with a 2% increase each year, averaging over $160,000 per year across a 20-year period. The city will also receive a one-time payment of $175,000 to fund an economic development program and reference the lease.
The investors will also pay an annual rent of $1,000 per acre with an increase of 2% per year. The agreement will restrict the project from encroaching on the property’s wetlands and hold the investors responsible to remove the solar infrastructure at the end of the lease term.
Svedlow also said that a wildlife-friendly fence that enables smaller mammals and deer to pass through would be built around the project. He said this fence has been used successfully in Vermont projects.
Interim City Assessor Stephen Hamilton called the project a practical use for the city to generate revenue on land that holds little to no market value for taxation.
“This provides a way to reduce taxes by bringing in payment in lieu of taxes, where there may not be a lot of return for the land,” Hamilton told the council.
Hamilton also noted that, because the investors will need to do some development to the land, such as installing a drainage system, the land could be in better condition when the agreement expires.
City Planning and Development Director Nancy Merrill said that the land’s features limit its use potential or attraction to buyers. Wetlands cover considerable portions of its area, and power lines for National Grid and Green Mountain Power pass through it. The land also has challenging topography and is not highway-visible.
Project owners and the city also plan to discuss a potential power purchase agreement for 3-4 MW power from the project. Svedlow said that this power would only be usable for municipal or industrial-sized buildings, but taxpayers would benefit through the energy savings for power used by city facilities.
The lease agreement would cover a 20-year period and include options to extend the lease at five year intervals. Svedlow said that solar arrays have a typical life of 20-25 years and that similar solar projects can remain economically productive for 30 years. He estimates the project would lease the land for about 40 years.
Resident Jim Contois, running as a Ward II candidate for city council, asked in public comments whether the city had the ability to create its own solar project. Contois pointed to the revenue that similar solar projects generate per acre, and felt that Claremont may be getting to little from the agreement.
“I don’t like these ‘Take it or Leave it’ type of agreements for the city, where we’re giving away our land too cheaply,” Contois said.
Merrill said that the city owns other land with potential for other energy projects, but she does not believe the city has the resources to build and operate its own energy project.
Merrill said that the city will likely include a “most favored nation clause” in the agreement, which would require Steel Mill project owners to match the terms if another company makes a better offer.