Framingham Mayor Rejects Millions in Utility Savings in Fiscal Crisis
The Mayor inexplicably cut the Farley solar project when he slashed the capital budget. Farley utility savings would total $3.7 million.
In a recent article we reported that the Mayor had cut the FY25 capital budget to $25 million from $72 million in FY24. See:
Framingham Mayor Unexpectedly Slashes FY25 Capital Budget
One of the projects which got the axe was the solar roof for Farley School. The remarkable thing about that project is that it makes money for the city – lots of it.
Passage of the Federal Inflation Reduction Act (IRA) on August 16, 2022, changed the whole payback picture for municipalities installing solar roofs and canopies. Utility savings for solar installations owned by municipalities are now about 8 times larger than with the prior Power Purchase Agreement (PPA) model approach used for Fuller and Brophy solar projects.
That is because municipalities can now pay for the solar panels and their installation and get 30% off the price through an IRA federal reimbursement. That way they get most of the financial benefit rather than the much smaller returns from PPA projects, where the vendors own the panels and get most of the financial benefits.
If the Farley project funding is restored to the FY25 capital budget, in just 3-4 years it will produce more utility savings than the Fuller solar roof will in 25 years!
Full details of the Farley project can be found here:
Framingham Public Schools FY25 Capital Improvement Project Requests pp.8-235
An easier read may be found in the Gale Associates report at:
Gale Associates Farley Project Summary Analysis
where on p.12, the following table summarizes the Farley project finances for two options:
1. Direct, which means the city owns the system.
2. PPA which stands for Power Purchase Agreement, which was the only kind of cost effective agreement available to municipalities prior to passage of the Federal Inflation Reduction Act, and amounts to having a vendor own the panels, rent the city building roof where they are installed, and give the city some financial utility savings.
See how the utility savings for Framingham (20 year cash flow) is $3,689,756 from owning the solar system compared to the PPA utility savings of $429,090. That means $157,036/year in utility savings for the city (see table: column 6), compared to just $21,454.50/year for a PPA approach.
Ownership gives about 8 times the utility savings of PPAs!
Solar panel ownership is obviously the way to go and the only cost to the city is for the bonding for the project. If the bonding annual debt service is about 5% of the project cost, since the construction cost of $1.35 million is offset by the 30% federal reimbursement of $0.40 million (from the above table – that’s the ITC figure), we get to bond $0.95 million at 5%, which is about $50,000/year.
So, the annual utility savings of $157,000 minus the $50,000 annual debt service gives a net savings of $107,000/year for the city.
That means that if the city goes ahead with the Farley project, it will have an additional $107,000/year in net savings for its annual budget for each of the next 20 years or more.
Now consider that a Farley scale solar roof project could be done at 13 other schools. Then the annual net savings multiply by 13 to reach $1.4 million/year.
Now add in 13 parking lots and add a solar canopy to each of those and you double the net savings to $2.8 million/year.
If the city started with Farley and then scaled up its solar projects to include to all the other school roofs and parking lots, the 20 year net savings would be $2.8 million * 20 = $56 million.
It is crystal clear that there is big money in solar installations for the city, and the community should send the Mayor a strong message to get going with Farley immediately and expand that approach to all the schools in the near future.
Energize Framingham is running a petition drive to send the Mayor a message to expand both solar and electric vehicle investment in the FY25 capital budget. That includes the Farley project. If you want to see the city save money and combat climate change, join that effort at: