Tax credits ease financial burden for Marblehead solar investment

When Marblehead Municipal Light Department Commissioner Jean-Jacques Yarmoff first visited Massachusetts’ largest solar installation, the view from ground level belied its true scale. Standing at the operations center in Ludlow, he could see just 10 rows of panels stretching toward the horizon, with the rest of the 35-acre facility hidden as the land sloped away.

The Massachusetts Municipal Wholesale Electric Company/Master Sergeant Alexander Cotton Memorial Solar Project in Ludlow spans 35 acres and includes advanced bifacial panels that optimize energy production. Marblehead owns 11% of the facility. COURTESY PHOTO/MMWEC

“It’s massive, but you really can’t see the full extent from there,” Yarmoff said. “The best view is from above, where you can see it spread across what was once military land — some say it looks like a miniature New Hampshire.”

That sprawling solar array, built on the grounds of the Massachusetts Municipal Wholesale Electric Company received welcome news last week: a $2.34 million federal tax credit that could eliminate three and a half years of debt service costs for its six participating communities, including Marblehead.

Known as the MMWEC/Master Sergeant Alexander Cotton Memorial Solar Project, the 6.9-megawatt facility represents Marblehead’s latest step toward achieving ambitious carbon-free energy goals.

The federal tax credit will reduce the cost of power from the solar facility by about 2 cents per kilowatt hour – from 7.6 cents to 5.5 cents. To put this in perspective: When Marblehead residents turn on their lights or run their dishwasher, the power feeding their homes costs the light department about 4 cents per kilowatt hour on average. While solar power remains slightly more expensive even with the tax credit, its small portion of Marblehead’s total energy mix – just 1.5% – means it won’t significantly impact residents’ electricity bills, Joseph Kowalik, MMLD general manager told the Marblehead Current. He added the real value is that the tax credit helps make the first solar project more economically viable while advancing the town’s clean energy goals.

“We’re always looking at the business model behind clean energy projects to see if we can add them to our portfolio without materially impacting electricity costs for our customers,” said Kowalik. “This project, combined with the value of its renewable energy certificates, fits within our benchmark for where we want to be.”

The tax credit comes through the Inflation Reduction Act of 2022, marking one of the first instances of a public power joint action agency receiving direct payment under the program. The project, which began development in 2021 and was energized in 2023, currently provides approximately 1.5% of Marblehead’s annual energy needs.

The site’s history adds intrigue to its current mission. Built on former Westover Air Force Base land, remnants of Cold War-era military installations still dot the landscape.

“You can still see all these incredibly strong bunkers,” Kowalik noted. “Rows of bunkers that once housed missiles.”

The Cotton Solar Project joins MMLD’s diverse power portfolio, which already includes ownership stakes in nuclear plants, wind facilities and hydroelectric operations throughout New England. Currently, 42% of Marblehead’s energy comes from carbon-free sources.

Here’s how MMLD’s carbon-free power sources breakdown:

— Millstone 3 Nuclear: 12,704 MWh (26.8%)

— Seabrook Nuclear: 12,882 MWh (27.2%)

— NY Power Authority Hydro: 7,858 MWh (16.6%)

— Hydro-Quebec: 6,570 MWh (13.9%)

— Berkshire Wind 1: 1,465 MWh (3.1%)

— Berkshire Wind 2: 1,272 MWh (2.7%)

— Hancock Wind: 2,077 MWh (4.4%)

— Eagle Creek Hydro: 2,542 MWh (5.4%)

Total: 47,370 MWh out of 100,000 MWh used annually.

MMLD Commissioner Jean-Jacques Yarmoff, left, and General Manager Joseph Kowalik visited the Cotton Solar Project, which supports the town’s push toward carbon-free energy. COURTESY PHOTO / JEAN-JACQUES YARMOFF

Five other municipal utilities — Boylston, Ipswich, Mansfield, Peabody and Wakefield — joined Marblehead in financing the project. Marblehead’s 10.87% share represents roughly $1.58 million of the total construction cost.

The facility employs advanced bifacial module technology, allowing panels to capture both direct sunlight and reflected light from their backsides, enhancing year-round production efficiency. According to Kowalik, the system has proven highly reliable, with only four panels requiring replacement during its first year of operation.

Officials emphasize that the project’s primary benefit lies in advancing Marblehead’s clean energy goals while maintaining stable rates.

“In New England, carbon-free energy isn’t always less expensive than traditional sources,” Kowalik said. “Our objective is to find clean energy projects that are close enough to our average costs today that we can add them to our portfolio without materially impacting electricity prices for our customers.”

The Cotton Solar Project complements MMLD’s other renewable initiatives, including support for residential solar installations. By the end of 2023, Marblehead had 83 residential and commercial solar installations with a combined capacity of 721 kilowatts, generating 439 megawatt-hours annually.

“Individual solar installations, while not negligible, won’t drastically change Marblehead’s power portfolio,” Yarmoff noted. “That’s why we need both — encouraging individual clean energy adoption while pursuing larger utility-scale projects through MMWEC. We need clear goals and clear ways to get there.”

By Will Dowd

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