Correction (11/16/2021): In the original version of this story, the energy demands that this solar project could meet were miscalculated. The story originally read that “the solar array could meet the energy demands of over 4,000 average U.S. homes.” It could likely meet the energy demands of over 630 average U.S. homes.
The 20 year net benefit of this project was previously written as $31.8M—a typo. They’re actually close to $3.18M over 20 years.
ITHACA, N.Y.—The City of Ithaca is aiming to make big strides on its renewable energy capacity in order to meet the goals outlined in the Ithaca Green New Deal (IGND), which seeks to decarbonize the City’s economy by 2030.
At their Wednesday meeting, the City’s Planning and Economic Development Committee (PEDC) received a detailed presentation on a potential solar and energy storage project. The proposal is coming from Nexamp, a solar energy developer based in Boston. Ryan McCune, a business development manager at Nexamp and an Ithaca area resident, gave the PEDC the presentation, which was just a preview of the proposal. The actual proposal will be coming before the PEDC in January.
The specs on the solar project are a generation capacity of 5 MWac, and a battery storage capacity of up to 10 MW. The solar array could meet the energy demands of over 630 average U.S. homes. McCune said that this should bring the City of Ithaca close to meeting all its current energy demands with renewable sources. However, electricity demand is expected to grow as the City of Ithaca plans to aggressively electrify everything from buildings to public transportation.
The solar arrays would occupy about 25 acres of a fenced-in area within a floodplain behind the Walmart Supercenter in Ithaca. McCune made the pitch that this solar project is a strong way to get value out of land which isn’t suitable for many kinds of development. Unstable soils and flood risks are issues McCune said Nexamp has experience designing around.
“The land that we’re looking at here is challenged. We feel that it’s the highest and best use for some of this land,” said McCune.
Under the proposal outline McCune shared, Nexamp would own and operate the solar project, financing it and selling the power generated back to the City. They would rent the City’s land, ideally operating under a 30 or 40 year lease.
McCune said that Nexamp would also be seeking a payment in lieu of taxes, or PILOT, agreement with Ithaca Area Economic Development (IAED) in order to improve the financial outcomes of the project.
According to Nexamp’s calculations, the City’s net benefits from this project are estimated at $162,000 starting in year one, and are estimated to be $31.8M over 20 years. And, by having solar energy banked in local batteries, McCune said that costly upgrades to transformers and grid substations can be effectively postponed.
McCune shared with the PEDC that the Ithaca South Hill substation—the particular substation that this solar project would be hooking up to—will likely need around $4M in upgrades sometime in the near future. The company is working with the City of Ithaca to propose a “non-wires alternative solution” to NYSEG, which would utilize Nexamp’s storage system to avoid having the energy generated from the solar array add stress to the substation. Alongside seeking various approvals from the City, Nexamp is also seeking to enter a “Grid Maintenance Contract” with NYSEG as well.
However, with Ithaca’s plans for mass electrification, an upgrade to this infrastructure will eventually need to happen. NYSEG will be footing that bill, but it will be passed along to ratepayers.
“We are looking forward to a situation where electrification of a great deal of buildings in the City creates a much higher demand that we’re going to have to meet,” said McCune, “So this substation will have to be upgraded, NYSEG has even admitted so.”
Nexamp has also previously agreed with NYSEG that they would enter a contract, giving the utility control to sell energy from the battery storage system when it saw fit. This would be done through a “grid maintenance contract.”
McCune told the committee that Nexamp’s desired outcome from the presentation is a letter of intent from the City to develop a solar project with the company, whether it is at the proposed site or another one. Nexamp is also looking to have the City give it the right to put in an interconnection application with NYSEG—basically an application to connect to the grid. This application process would give Nexamp the information they need to further explore the feasibility of the solar and storage project they’re proposing. Lastly, McCune said Nexamp also wants to start exploring more specific deal structures and energy sale agreements with the City.
McCune said that when those conditions are met, then Nexamp could start doing site reviews and preliminary financial modeling in the spring of 2022, which would track the potential project to start construction in the winter or summer of 2023.
As this project to build solar capacity within the City moves forward, potentially within the shrinking amount of City-owned creek-side floodplain, McCune said that Nexamp is more than willing to participate in conversation around the uses of that land.
“I’m assuming there will be a great deal of public comment around the usage of that area that we will have to contend with,” said McCune. ‘We are both interested and excited about having those conversations.”
Additional Corrections and Clarifications (11/16/2021): In the original version of this story, the cost of upgrading the South Hill substation was described as being a bill NYSEG would have to pay for. This cost would be passed onto ratepayers.
Nexamp is working directly with the City of Ithaca to propose a non-wires alternative solution to move back the timeline on upgrading the South Hill substation. This element of collaboration was not previously emphasized. This passage of the story was also edited in order to provide greater clarity on why the non-wires alternative solution Nexamp is seeking with NYSEG, and why it could defer necessary upgrades at the South Hill substation.