With federal incentives, Dover locks in savings on solar power

A bright future is in store for those who get their electricity from Dover: Lower costs. 

“It’s very good news,” Jim Robinson, the city’s electric director, said of newly approved plans to buy as much as 75 megawatts of solar power. “The price of panels has come down dramatically, and panels are much more efficient.” While working in Massachusetts five years ago, he bought panels that generated 200 watts each. Similar-size panels today generate 300 watts — at half the price.

Sixteen entities, mostly from Delaware, submitted bids for a 25-megawatt deal. When city officials realized that costs were so attractive (federal tax incentives sweeten the deal for bidders), they tripled the concept, and that bigger target means it’s likely that multiple bidders will handle the deal. 

City Council unanimously voted in August to authorize city manager Donna Mitchell to contract for up to 75 megawatts at a blended price of $42 per megawatt hour (blended means some vendors could be higher, some lower). Robinson expects a decision by the end of September, with solar-generated electricity arriving as early as the spring of 2021. 

Dover’s current delivered cost is $63 per megawatt hour (with municipal expenses pushing average customer costs to $110 per megawatt hour (for consumers, better known as 11 cents per kilowatt).

For this foray into solar, Dover is only paying for delivered electricity. It’s not sinking tax dollars into buying land or building the facility, he said. And it’s getting a rate commitment for 25 years.

It’s all a welcome contrast to SUN Park, a $50 million 10-megawatt field of solar panels that opened in 2011 on 103 acres in the city’s Garrison Oak Technology Park. 

“I’m pleased,” said David Anderson, a city councilman and SUN Park critic. “There’s nothing magical about solar. It needs to be economical. … The last deal costs us millions of dollars. This one will lock in savings.”

“It’s finally gotten to the point that the numbers make sense,” said David T. Stevenson, director of the Caesar Rodney Institute’s Center for Energy Competitiveness, referring to the technology and economics behind solar and suggesting that Dover was “jumping the gun” by building SUN Park.

Solar parks need two to three acres per megawatt, so this deal will entail panels covering about 200 acres. The parks also need to meet technical requirements to connect to the power grid.

Dover did not consider battery storage as part of the solar package. “The technology is not there yet,” Robinson said. “We’re waiting for the economics and the technology to get better.”

State law mandates utilities derive 25% of their energy portfolios from renewable sources by 2025. When fully operational, Dover’s new plan will bring its renewables to 25% to 40%, Robinson said, depending on the amount that the city decides to buy. 

Not everything is rosy. “There are big reliability problems” when renewables top 15%, Stevenson said, offering Texas as an example. Texas relies upon wind for 20% of its power, and its electricity grid consists only of Texas. So when temps soared and winds died down in August, Texas went through rolling brownouts and paid as much as $9,000 per megawatt hour, he said.

Dover’s energy sales for the last fiscal year was 740 million kilowatt hours, Robinson said. Its peak usage is about 150 megawatts, and a 75-megawatt solar portfolio might hit full capacity only in the sunniest of afternoons. That’s why renewables are now matched with fossil fuel. Delaware is also part of a grid that covers 13 states and D.C., and if it’s cloudy here, it could be sunny somewhere else.

Dover is one of nine members of the Delaware Municipal Electric Corp., which also includes Clayton, Middletown, Milford, Newark, New Castle, Seaford and Smyrna. Of the 58.3 megawatts of installed or committed solar generation in Delaware, 31.2 megawatts are in DEMEC member territories.

Middletown wants to develop up to 50 acres and maybe as much as 200 acres for solar. Lewes is also looking into solar, said DEMEC spokeswoman Heather Contant.

Solar is the way to go to meet the state’s mandate, she said. The state’s geography doesn’t support wind or water power or geothermal heat to a big degree. Delaware has about 5,000 renewable energy systems, primarily solar-powered. 

By Ken Mammarella
Contributing Writer

 

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