Tucson Citizen.com
Wry Heat - by Jonathan DuHamel

Is Proposed City Solar Project Good For Ratepayers?

by on Dec. 18, 2010, under Energy

On Friday, the Tucson City News blog featured a plan by the City to install solar panels on six facilities around town. The City will finance construction by selling $11.2 million in bonds and project a savings in electricity costs to the city of $3.9 million over the 25-year life of the project. (And we all know how well City financial projections turn out.) The bonds will pay about 3% interest.

“These bonds will be repaid through the Tucson Electric Power Renewable Energy Standard Tariff”, that is, a surcharge to your electric bill. I presume that the interest will also be charged to ratepayers.

Interest payments to bond holders (at 3%) will be $336,000 per year for 25 years (total $8.4 million).

So, if I understand this correctly, ratepayers will eventually have to pay back $11.2 million of bond principal plus $8.4 million in interest for a total of $19.6 million to save the City $3.9 million. Does this sound like a good deal for ratepayers? Perhaps I just don’t understand City high finance.

“Tucson’s Mayor and Council will discuss the projects on Tuesday, December 21, 2010…” I suggest you ask your council person about this great deal.

Copyrighted by Jonathan DuHamel. Reprint is permitted provided that credit of authorship is provided and linked back to the source. Check the ARTICLE INDEX page for more posts on geology, natural history of the Sonoran desert, climate change, and energy. Also check the BOOK REVIEWS page. Comments that fail to conform with the Tucson Citizen commenting guidelines will be deleted. Note: I have no control over the ads that may appear on this page.

This entry was posted on Saturday, December 18th, 2010 at 4:03 pm and is filed under Energy. Tags for this post: , , , , , . You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

RSS feed for this post (comments)
  • http://www.kcqfoods.com/ Lazaro Bohnenkamp

    OIL = Cash. Within your 70′s there was a period time when American citizens could only invest in gas on odd or even days depending on matching the last digit of their license plate. There was outrage and concern then and proponents of method vigour sources spoke out. Their warnings were unheeded. Fast forward 40 a long time. We are paying the selling price for greedy oil companies and lawmakers who profit from big oil. The bp disaster is what happens when corporations are greedy and will stop at nothing to make that dollars! An investment in Green Power can be a necessity. Americans are already told it seriously isn’t feasible to make a amazing vehicle that won’t run on gas. We happen to be told you can find limitations to Eco-friendly Vigour. We have been told that we desire oil to survive. We are actually told, “No, You Can’t.” This can be a nation of inventors, brilliant most people who CAN make Earth-friendly Stamina and green vitality work for us. We have to break the strangle hold that big oil has on our government and our lives. IF we survive the bp oil disaster, we Should Adjust.

  • By Stander

    This project will save $4.0 million.

  • David B.

    This is a waste of money, but it will only stop if the citizens will complain enough to the Arizona Corporation Commission.  The ACC is the entity behind this waste of ratepayer funds.  Only they can stop it.

    Solar is far too expensive to be a viable alternative.   Installing solar PV does not save money it wastes money and the taxpayers and ratepayer will pay the real cost.

    A 3 kW system cost about $13,500 and saves our utility about $150/yr in avoided fuel cost.  That’s a 90 year simple payback without counting the maintenance cost. 

    We are decades premature in deploying PV on the grid.

«
»