James Rada, Jr.
While the cost of solar energy from Emmitsburg’s two solar farms cost more than power purchased from First Energy, the cost of using solar is so much less that it created a savings of $72,000 for the Town of Emmitsburg last year.
Questions have been raised in town meetings and in print as to whether switching much of the town’s power consumption to solar energy was worth it. Much of this seems based on the fact that a kilowatt hour of solar energy costs around .08092 cents, while only costing the town around .06481 cents from First Energy. This is true. The actual cost of solar power is more, although the actual difference varies as the cost of power purchased from First Energy changes multiple times in a year.
However, as Town Accountant Cole Tabler points out in an analysis of the town’s energy costs, “[T]he true savings from solar are in the consumption charges that are greatly reduced or eliminated.”
This conclusion is based on an examination of the town’s actual energy bills. The costs without solar power are estimated based on First Energy’s bills alone. When Emmitsburg switched to using solar energy for its power needs, six taxes and surcharges were eliminated from their bills. These are the: Administrative Credit, Cogeneration PURPA Surcharge, Franchise Tax, EmPower MD Surcharge, Demand Resource Surcharge, and MD Environmental Surcharge. Also, three other charges and taxes are minimized because the power being purchased from First Energy is minimized. These are the: Distribution Surcharge, Maryland Sales Tax, and Electric Universal Service Fee.
In FY2016—from July 1, 2015, to June 30, 2016—the Town of Emmitsburg consumed 1,657,216 kWh among its twenty accounts. This usage includes the higher consumption of the town’s new wastewater treatment plant.
The cost of power (including solar) for FY2016 was $134,100 (rounded to the nearest $100). In addition, the extra taxes and surcharges on the power bills amounted to $68,000 (rounded). So, the total amount that the town paid for its power last year was $202,100.
To get an estimate of what the town would have paid for its power if it had been entirely drawn from First Energy, the total usage was multiplied by the prevailing rate. This changed multiple times throughout the year, so an average cost of .06481 cents/kWh was used. Using this rate, the energy cost last year was $107,400 (rounded). This is $26,700 less than it cost for solar.
The taxes and surcharges on that amount of power purchased from First Energy would have been $167,300 (rounded) or $99,300 more than the town paid for solar.
The bottom line is: Without using solar energy, the town would have paid $274,700 for its power last year, compared to what it actually paid ($202,100).
By converting to solar power, the town saved $72,600.
Looked at in a different way, the town would have had to been paying .02099 cents/kWh or less for switching to solar power to have been a loss.