Printable VersionEditor’s note: The Lake Havasu Unified School District governing board took a first step this fall toward the possible installation of a solar system at the district’s only high school. They are currently waiting to review a contract, still in negotiations, that could jumpstart one of the largest single solar projects at a K-12 district in the state. This third story of a three-part series examines the funding of the potential project.
The Lake Havasu Unified School District governing board has neither seen the contract currently under negotiation for the project, nor has officially approved the project.
But school officials have repeatedly said they don’t expect to pay any out-of-pocket expenses to install the anticipated 2.7-megawatt system because of the abundance of tax credits and rebates offered by the state and federal governments, as well as the utility company.
School districts are unable to receive the tax credits and rebates because they do not pay taxes, according to several officials. A new law signed this year allows private companies to enter into agreements with school districts for solar installation, and, in turn, the private companies receive the tax credits and rebates and apply them to the projects’ costs.
But until the governing board sees the contract, its members don’t know for sure what the project size, cost, savings or out-of-pocket expenses will be.
In September, the board chose APS Energy Services to move forward with contract negotiations. The contract could be in front of the board by the end of February, according to APS ES spokesman Steve Frost.
Sarah Helmer, APS ES manager of marketing and communications, wrote in an October e-mail that there were more than $32.5 million identified in possible tax credits and rebates to help cover the project’s costs if it were installed.
The majority of the identified funding comes from the school’s utility company equaling more than $18.1 million.
Helmer stated in the e-mail the incentives would be received throughout a 20-year time period.
However, the exact incentives, amounts of incentives or terms of the incentives for LHHS won’t be revealed until the contract is finished, according to several officials.
She further stated, “Because these credits and incentives are provided over time, the district will finance a portion of the project up front. As with any financing, such as a home mortgage, there will be annual finance charges that will occur over the 20-year term.”
But school board officials have said previously they have no money up front to get the project under way.
Two of the larger systems at K-12 districts in the state — Deer Valley Unified School District and Sedona Oak Creek Unified School District — both used voter-approved bond money for their systems. One of Deer Valley’s systems is 1 megawatt; one of Sedona’s systems is 100 kW.
But since giving APS ES the green flag to move forward with the negotiations in September, local voters have since turned down the extension of two property taxes in November that stripped millions from district’s budget starting next fall.
The district’s governing board is in the process of possibly closing down one of its two middle schools next fall to meet an expected $1.7 million less in funding next year, largely due to the voters’ collective decision.
The district is still uncertain about how much money it will receive from the state department of education, which primarily funds districts’ budgets based on student attendance.
Missy Wood, school district director of business services, previously said this fall that “if the credits weren’t available … there would be no way we could take on that type of debt even if we were to finance it.”
Wood said Monday it is her understanding their regular utility bill payments would go toward the financing.
“But I can’t really confirm that until I see a bottom line or a contract,” Wood said. “The board has not accepted anything at this point. I’m not sure exactly what the package will look like when it’s completed. Until I see their bottom line or their negotiations or the terms they come up with, I really can’t give you an answer.”
But Wood also echoed a similar sentiment from several other sources around the state regarding the solar project.
“I do think the road that we are going down is the right (one),” she said. “Basically, (it’s) where the future is heading.”
Almost every single one of the nine entities contacted by Today’s News-Herald said they were working on bringing either more or larger solar projects to their arena.
“It’s wonderful to see school districts like Lake Havasu being able to move forward with solar,” said Arizona Corporation Commission Chairwoman Kris Mayes. ACC regulates utility and renewable energies in the state. “When you put all (of the tax rebates and incentives) together, solar becomes more affordable for schools. Schools are going to be able to lower electricity bills and at the same time teach students about renewable energy and science and solar.”
You may contact the reporter at jleatherman@havasunews.com
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