City faces a decision as costs for its planned solar farm rise 25%
Rising equipment costs at a proposed solar farm in Iredell County are threatening the city of Charlotte's goal to switch city buildings to 100% carbon-free electricity by 2030.
Two years ago, the city contracted a company called Ecoplexus to build the project, which would supply solar power through Duke Energy. But Ecoplexus now says it needs a 25% cost increase or it will default on the project.
Sarah Hazel, Charlotte's chief sustainability and resiliency officer, told city council members Monday night: "We received a note from our solar developer that in order to continue in this agreement with the city of Charlotte, they would need to increase their product charge because of several macro economic factors that are really prevalent in a variety of industries, but certainly in the solar industry and in renewable energy."
Costs are up because of inflation, higher interest rates, supply chain delays and tariffs, Hazel said.
Construction has not started, and the city has not spent any money so far. Any costs would come only once power begins flowing, Hazel said.
The cost increase would mean that instead of saving money on its electric bill, the city would pay an extra $750,000 a year. Hazel compared that to the money Charlotte has spent building its own solar facilities on top of public buildings.
The extra cost would save a project that would supply 17% of the city's power in 2030 and help the city meet its climate goals. Hazel said.
But if the city drops out, it may have trouble replacing that renewable energy, she said.
"There are limited and uncertain options for this type of a program," she told the council. "There are other options that will allow us to continue to strive towards making progress (on the goals), just not readily available options that are this large today."
Hazel also told the council that if the city agrees to update the contract with the higher equipment charges, Ecoplexus plans to sell the project to a North Carolina solar developer, Pine Gate Renewables.
The project is one of four in a Duke Energy pilot program called Green Source Advantage. Others are Wells Fargo, Bank of America and Duke University. All are facing delays, Hazel said.
"Everybody is going through very similar processes as we are right now. This is not something that is sort of unique to Charlotte," she said.
Added Duke Energy spokesman Randy Wheeless: "None of them are up and running yet. I think they've been hampered by some of the same delays (as Charlotte) as well. But we think they'll still get to the finish line."
Several council members said they were disappointed with the turn of events. "Obviously a regrettable kind of choice to have to make," Mayor Vi Lyles said.
The council took no action. City Manager Marcus Jones said the council has until January to make a decision.