A report from the Connecticut Conference of Municipalities said cities and towns are being misled on cost and savings from solar projects for local government facilities.
With a power purchase agreement, the solar installer owns the system and sells the electricity to the host site. Â CCM claims the installers are saying the system will save more than it will in order to justify a higher purchase price.
CCM said the solar installation companies are overestimating how much a solar system will lower electricity bills. While a system can reduce the generation charges on a bill, the solar offers little savings on the transmission and delivery part of the bill. The two separate charges make up the majority of electricity bills.
Because of this overestimation, solar installation companies are using unrealistically high power purchase agreements in order to obtain subsidies under the state’s 21-year, $1 billion renewable energy credit program, according to CCM.
To avoid being mislead, CCM recommends any local government or business not agree to a power purchase agreement were the price of the solar power from the system is higher than the generation rate on utility bills.
