Lanesborough Solar Developer Looks to Reduce Leasing Cost
LANESBOROUGH, Mass. — A solar array company is asking the town to reduce its leasing price because its being affected by high tariff costs.
Kirt Mayland, a solar developer and the town's consultant, updated the board on the solar array project on Old Orebed Road on behalf of EDF Power Solutions, which was the highest bidder on the project in 2022.
The company currently pays to lease the capped landfill at around $11,000 an acre; the land is roughly 10 to 11 acres, going up over 1 percent a year for 25 years with an option to extend another five years.
The town has not yet signed a lease as Mayland said the project still needed to proceed through the relevant permitting process, including a Planning Board special permit and, possibly, Conservation Commission review because of a potential buffer-zone issue.
Mayland said the project's grid connection had become a major expense. The interconnection estimate was about $1.5 million, including new three-phase lines along Old Orebed Road. The developer has spent roughly $220,000 on studies, development costs, and payments to the town and $340,000 in interconnection costs with $1.5 million remaining.
EDF is asking to reduce the annual leasing cost by $40,000. Currently, it pays $114,000 per year; the personal property tax estimate will remain unchanged.
"Due to construction costs having increased over the past four years, inflation and the tariffs that they would like to … they have to reduce the lease price by $40,000 a year, so it would go from $114 [thousand] down to $74 [thousand]," Mayland said. "Personal property taxes at 26 would not be affected."
Mayland said had suggested the developer consider a smaller reduction early in the lease term, with payments increasing later, but that EDF did not agree. If the board assented to the proposed reduction, the combined annual revenue figure would be $100,000.
The capped landfill could qualify for an additional 10 percent federal tax credit associated with contaminated or brownfield properties, Mayland said, but the EDF was not comfortable claiming that credit and its investors shared the concern.
He plans to prepare a project-specific explanation for EDF to see if it could help get them some more money back and, in turn, negotiate a better lease.
If EDF does not agree, Mayland noted that the town's Request for Proposals allows it to terminate a contract if the developer wants to renegotiate.
"We also have language in our RFP that said ... if they do come back and try to renegotiate, we can terminate. And if we terminate, they've got to sell us everything they've done and give us everything they've done at cost," he said. "They can't mark it up. We don't have to pay for employee time. They just have to sell at a cost. In that meaning, I wouldn't ask the town to do that. We would have to have somebody lined up, another party to do that."
The Select Board objected to accepting the full $40,000 annual reduction. Mayland said he would check whether EDF's revised offer, if it has one, remained competitive for Massachusetts landfill projects and he will also contact other capable developers to see whether a better arrangement was available.
Tags: municipal solar,
