Mendocino County opts for smaller cash-funded solar project at administrative center

Mendocino County supervisors voted to proceed with a smaller, cash-funded solar project at the county administrative center rather than a larger financed package covering five sites.

The board voted unanimously to direct staff to pursue “option 2,” a $1,516,000 solar-only project at the administrative/planning building funded with the county’s remaining PG&E carbon-reduction settlement funds, and to continue work with Ameresco on next steps and scope details.

County staff and Ameresco presented two primary project models. Ameresco’s larger proposal would have covered solar arrays at multiple county sites plus heat-pump water heaters for jails and was estimated at roughly $4.9 million; Ameresco said that package showed a projected cumulative net savings of about $8.14 million over 25 years (not discounted). The smaller option uses $1.5 million in cash, would not require financing, and was shown in Ameresco materials as yielding a roughly $1.99 million nominal 25-year net savings (not discounted).

Doug Anderson, Mendocino County Capital Projects Manager, told the board the goal of the discussion was to clarify the county’s priorities on whether to incur equipment financing debt and how to prioritize cost savings versus carbon reduction. Keith Smith, account executive with Ameresco, presented the technical options and the firm’s initial cost and savings estimates.

Ameresco’s materials showed the larger, multi-site project would include modest investments in heat-pump water heaters (about 1% of the $4.9 million package, roughly $50,000 for two jail installations) and larger solar installations across four to five sites. Smith said in his presentation, “This project at 4,900,000.0 would result in a net savings of 8,140,000.00 over the next 25 years.”

Supervisors pressed staff and Ameresco on the assumptions behind the savings. Supervisor Williams highlighted the difference between nominal and present-value calculations and said the board had to weigh carbon goals against tight county finances: “We are choosing between 2 bad options here.” Acting Assistant CEO Sarah Pierce explained that the Ameresco slides showed nominal savings and gave a present-value example (the large project’s present-value savings would be roughly $2.8 million rather than the $8.1 million nominal figure).

Staff and Ameresco also discussed how recent federal tax-law changes and “foreign entity of concern” rules affect cost and domestic-content requirements. Warren (Ameresco’s director of engineering) summarized the compliance uncertainty and said guidance on non-foreign-entity content thresholds should be clearer in the coming weeks; staff told the board the county would receive additional information in 30–60 days.

Board members split over risk tolerance for taking on financed debt. Supervisor Mulhern and CEO Antle favored the larger project for carbon and co-benefits such as shade-covering vehicle parking and educational opportunities; several other supervisors expressed concern about borrowing and long payback uncertainty. Supervisor Norvell argued the $1.5 million cash project capped the county’s downside and allowed an initial, lower-risk step.

The board’s motion — to proceed with option 2 using the remaining PG&E carbon-reduction funds and to ask staff to prepare a site-specific scope for return — passed unanimously. Staff said they would attempt to claim available investment tax credit benefits where feasible and would return with detailed scope, site models and a financing recommendation if the board later wants to pursue larger coverage.

The board also asked staff to monitor tariff and material-cost fluctuations, to assess the ability to secure the investment tax credit before the 07/04 construction start safe-harbor deadline, and to confirm domestic-content and foreign-entity compliance obligations as guidance becomes available.

Many technical details presented were preliminary and staff said final cost and savings figures will change when site-specific designs and procurement bids are prepared. The county will apply the $1,516,000 PG&E funds to the admin-center solar array and return with a full scope and project schedule for the board’s approval.

Ending: Supervisors framed the vote as a cautious first step: prioritize getting a project built soon using available settlement funds while leaving open the option to scale if economics and federal guidance improve.