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Report: $340,000 solar array for Department of Social Services shows roughly 18.7-year payback with federal credit
Summary
City staff told Lexington City Council that a $340,000 solar installation for the Department of Social Services would repay the investment in about 18.7 years assuming a 40% direct-pay tax credit from the Inflation Reduction Act; payback estimates vary widely depending on assumptions and financing.
City Manager Tom reported to the Lexington City Council on April 17, 2025, that a proposed $340,000 rooftop solar array for the Department of Social Services (DSS) would produce an estimated payback period of 18.7 years when the federal direct-pay investment tax credit under the Inflation Reduction Act is included.
The payback figure reflects the 40% direct-pay Investment Tax Credit (ITC) that the city would receive as a cash payment after project completion; the report lists that line-item as approximately $136,000. City staff said that without that federal subsidy, the same analysis shows a payback closer to 30 years and that individual consultant reports ranged from about 11.9 years to 29.8 years…
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