With an eye toward future installation of solar arrays on township buildings, Ferguson Township’s Board of Supervisors on Tuesday approved an agreement that will lock in federal tax credits before they expire in July.
The contract with State College-based solar company Envinity will ensure the township can receive up to $352,420, or 40% of the estimated $881,051 total cost if it moves forward with full installation of panels on four buildings over the next four years.
To safe-harbor the tax credits under federal rules before the July 4 deadline, the township will pay Envinity $61,674, or about 7% of what would be the total cost for the multi-phase installation, which is enough to qualify under IRS guidance. Projects would have to be completed within four years to remain eligible for the credits.
Because Ferguson Township does not pay taxes as a municipal government, it would receive the credits in the form of a direct payment, an Envinity representative said.
Township Manager Warren Obenski stressed that the agreement does not commit the township to the full build-out, but will protect the maximum amount of credits available however much of the project moves forward.
“What we’re asking is if the township has any interest in putting solar in within the next four years and you wish to save about $350,000,” Obenski said. “You are not committing to spending anything other than the [$61,674] listed here, but that will essentially potentially save up to that amount. We can decide to do one building, multiple buildings, but that’s not what’s being asked of the board.”
The agreement includes an optional buy-back clause for purchase of unused panels by Envinity for 70% of the initial cost.
Supervisor Omari Patterson said several residents raised concerns at a previous meeting about the long-term endurance of current solar array parts and asked Assistant Township Manager Jaymes Progar if that feedback had been addressed.
“We’ve had discussions on whether things are still changing drastically or if they have plateaued,” Progar said. “What if you buy something today, is there a new better product tomorrow? Or are we kind of in the iPhone era where we’ve extended that, and now we’re adding some aesthetic things, an inch or two here? We’ve had those discussions.”
Speaking during public comment Ferguson Township Planning Commission member Bill Keough said he worried the supervisors were moving too quickly toward spending decisions for the project.
“I am concerned about the fact that we’re moving awfully rapidly with regard to already now starting to authorize the spending of money and moving money around in our budget and so on, it just seems to be happening awfully quickly,” Keough said, adding he did not want to see “legislative creep,” in which incremental decisions were made without keeping the end result in mind.
He also said that the township should talk with other local entities that have solar arrays up and running.
“I think we need to ask individually those entities, ‘You had a projection as to what you would save monthly as you move forward with the projects. Is that projection actually happening? Is the savings actually happening?’” Keough said. “Because some of the feedback that I am getting is that the projections missed their mark. They’re not going as rapidly as the consultants tended to indicate.”
Patterson said he has heard only positive feedback from representatives of agencies that have installed solar at scale.
“I know I’ve asked [the University Area Joint Authority] every single time our representative is here about that project and how it’s doing from when they committed years and years ago to is it hitting the mark? It absolutely has in the responses I’ve gotten,” Patterson said. “UAJA… they have a series of panels and they’re working. I’d love to hear and see and understand those places where it isn’t working, where it isn’t meeting the mark, and I’m curious as to why. I’d love to have that information because the folks that have projects that I am talking to or before this body talked about some projects they are working on, they’re meeting the mark.”
Centre County officials have said that the array at the correctional facility in Benner Township has had positive cash flow every year since it went into service in 2020, zeroing out the jail’s electricity costs and generating more than $100,000 annually from the sale of solar renewable energy credits. (County commissioners last week approved an agreement for construction of what will be Centre County government’s third solar array.)
Resident and former supervisor Corey Gracie-Griffin said that with rising electricity costs showing no signs of slowing and no guarantee solar tax credits will be available again in the future, safe-harboring the tax credits now is a wise investment.
“I cannot see a future over the lifespan of this particular project where the township will not save money in the long term,” Gracie-Griffin said. “Those savings might take eight years to pay back the project. It may take five years, six, seven, potentially, but it might even be fewer given what’s happening with electricity rates right now. I think it is good governance for you all to be considering this project. And I think that particularly if there is any desire for it to happen in the next four years, which I think would be great, that you would have my full support in securing these tax credits, because it’d be very unlikely to have this kind of financial incentive anytime in the next two years, at least.”
Supervisors voted 4-0 to approve the agreement with Envinity. Matthew Heller abstained from the discussion and vote because his brother-in-law works for Envinity.
Board Chair Jeremie Thompson noted that in 2017 the township adopted a resolution “to develop a strategy to achieve net-zero greenhouse gas emissions as quickly as feasible, but no later than 2050.”
“So I think we are continuing to follow in the footsteps of all our predecessors who were here at the time that were looking towards the future of sustainability in the township,” Thompson said.
