Solar energy is coming to town, and it may be available to customers of Brainerd Public Utilities as early as next year.
Through a partnership with American Electric Power and the Brainerd Lakes Regional Airport, BPU is on track to build a roughly 40-acre, 5 megawatt solar array at the airport. The development would generate about 10 million kilowatt hours of solar energy a year. Add that to the hydro plant BPU owns along the Mississippi River, and roughly 15-20% of its power will be renewable.
“BPU’s been looking for a bigger project because one of our goals was to try to do a project that customers could invest in or be a part of,” Todd Wicklund, BPU secretary and finance director, said during an interview.
Consumers who want to generate their own renewable energy — like solar energy — may save money on their electrical bill down the road, but can be faced with exorbitant upfront costs, with residential solar panel systems costing anywhere from $15,000 to $40,000 to install.
Through BPU’s solar project, customers who buy in will pay a little extra on their bill each month to power their homes with renewable energy.
“This way, you’re not going to save any money on your power bill, but you’re being green and doing the right thing,” BPU Superintendent Scott Magnuson said.
The solar array is set to be constructed on a plot of land northwest of the runway at the airport, which Wicklund and Magnuson said they found to be one of very few viable pieces of land in the city for solar panels, as it does not have any trees. Building the solar field on BPU property, they said, would mean having to cut down trees, which they didn’t want to do.
Upon learning of the project, Airport Director Steve Wright was more than willing to participate.
“From our perspective we feel like just having this site available, it does help generate some renewable energy within our region,” Wright said. “We can contribute to that as far as the space goes. So it’s achieving the sustainable goals of airports, as well as our community.”
Brainerd Solar LLC, a subsidiary of American Electric Power, will build and own the 16,000-18,000 panel solar array but sell the energy generated to BPU for its use. Customers will then have the option to buy in, though the cost has yet to be determined.
Wicklund said there are two ways to charge for the solar energy. One is to charge a specific rate — like a penny or two per kilowatt hour, for example. The average BPU customer, Wicklund said, uses about 7,000 kilowatt hours a month.
The other method is to charge a lump sum based on how much renewable energy a consumer wants. If a customer wants 50% of their energy to be solar, they would pay a fixed rate of maybe $2 or $3 a month, for example, on top of their regular electric bill.
With the project still in the early stages, Wicklund and Magnuson have not yet decided which pricing method they will use.
“What we’re trying to do is encourage our customers here to help participate in this program,” Wicklund said. “If they want renewable, here’s a very good way to do it, and for a low cost and simple. We don’t want to make it complex.”
Customers would likely not have to pay for a subscription either, but would be able to opt in or out on a month-to-month basis.
If participation exceeds the power produced, the companies can add on to the solar field, with about 60-65 acres available at the airport for development.
With American Electric Power incurring all construction costs for the project, the company will benefit from federal solar investment tax credits, which are incentives given to businesses and residents for generating renewable energy.
In 2019, the incentive was 30%, meaning the company would get a 30% reduction in its overall corporate tax bill, Wicklund said, in the first year after the solar array is built. Though the rate dropped to 26% in 2020, because the power agreements between BPU and American Electric Power were drawn up in 2019, Wicklund said the company will likely try to get the 30% rate.
After the first year, the solar array will experience accelerated depreciation, meaning it will depreciate at a faster rate in the beginning of its life, which will in turn reduce American Electric Power’s taxable income, giving the company another cost savings in taxes. After eight years, the company will have essentially written off the solar array assets down to zero, at which time BPU will likely buy the system outright. Because BPU is a municipal utility company, it does not pay federal income taxes, meaning it would not get the tax credits American Electric Power will enjoy if BPU were to build and buy the solar array to begin with.
Along with the physical assets, BPU will also pay to buy out the rest of the 30-year power agreement after eight years. Wicklund said he doesn’t know what that cost will be, as the total cost of the project is still up in the air.
The airport commission issued a letter of intent to BPU regarding leasing the land but has not offered a full-fledged lease yet. Any new construction at an airport is subjected to Federal Aviation Administration oversight, Wright explained, meaning all the plans will have to be approved. Right now, the project is in the design phase, with American Electric Power and contracting engineers designing a solar array to fit within the available space at the airport. Then the FAA will have to approve the plan to make sure the project does not interfere with air navigation.
“The airport comes along with invisible surfaces that help airplanes approach in to the airport, and so we have to make sure that we don’t penetrate or cause anything to be constructed in those surfaces,” Wright said.
Glare is another factor to be taken into consideration. When solar panels were first built across the country, pilots encountered issues with sun shining off the panels and into their eyes, Wright said.
“So there does need to be a glare study that is conducted so that as the solar panels track with the sun, it does not create glare for the pilots’ eyes as they approach into the airport,” he said.
Looking at the initial designs, Wright said he doesn’t think the solar panels should negatively impact air navigational aids at the airport.
This project could also serve as a gateway to more solar endeavors at the airport.
“We’re looking at, can we integrate solar over our parking lots and other areas around the airfield that can contribute sustainable, renewable energy and still help our customers have value added services?” Wright said. “For instance, if we do solar panels over our parking lot, now we have covered parking, and so now we have a value added service for our winter customers, or even summer customers with rainstorms and whatnot.”
Economic development opportunities in other parts of the city will hopefully open up down the road, too, especially as large corporations focus more and more on building new spaces in locations with renewable energy sources.
As Google, for example, works to build a $600 million data center in Becker, the company is working with Xcel Energy to ensure 100% of its power comes from renewable sources. Xcel Energy plans to use several wind farms to supply energy to Google, the Star Tribune reported in May.
“Some people that are coming to check out if they want to build in the area, guess what? They may fly into Brainerd and they’re going to see this big solar project out there,” Wicklund said.
If all goes as planned, Wicklund and Magnuson believe construction could begin as early as the summer 2020, with power generation coming in 2021, though the project hinges on FAA approval.