Consultant says community solar could cut costs but interconnection, timing pose risks

Dave Messier, a consultant with Daylight Energy Services LLC, told the Denali Borough Assembly on June 10 that a borough-owned community solar array could substantially lower participating customers’ bills and partially offset Golden Valley Electric Association’s cost of generation. "If you guys put in place a project that costs a million dollars, you would be eligible to receive between 40 and 50% of that million dollars back," Messier said, describing the tax-credit structure enabled by recent federal rules and the Inflation Reduction Act.

Messier outlined a high-level model assuming a roughly $3.3 million capital cost, a 20-year financing term and the prospect of a 40–50% direct-pay tax credit. Using conservative Golden Valley rates (~$0.30 per kilowatt-hour in the model), his spreadsheet projected average residential net savings and a typical monthly subscription charge in the range of $37–$38, while subscribers could still save about $735 per year on average.

The presentation emphasized technical and scheduling risks. Messier said a one-megawatt AC system typically needs about six to eight acres and that the project model assumes no battery storage. More critically, he warned that tying into the local distribution network could trigger substation upgrades. "If we go higher [than about 1 MW AC], that might require this project to fund the cost of substation upgrades," Messier said, noting that transformer lead times can be 52–60 weeks and that Golden Valley engineers must verify feeder capacity.

Assembly members pressed Messier on ownership, administration and timeline. Options discussed included Denali Borough ownership, a third-party owner/operator, cooperative ownership or a hybrid model that reserved subscription allocation for borough residents first. Messier said the next technical step is an interconnection study with Golden Valley; he estimated that engineering review at roughly $10,000–$15,000 and larger interconnection costs at an estimated $175,000–$250,000 if upgrades are required.

Mayor and assembly members framed several follow-ups they want staff to pursue: an interconnection study to confirm whether distribution upgrades are necessary; a budget-compatibility review for any near-term design, permitting and procurement work; and a public-engagement plan to gauge subscription interest and ownership preferences. Assembly members stressed that while the tax-credit window makes timing urgent, they do not intend to commit capital without the technical certainty an interconnection study would provide.

The assembly did not vote on a construction or financing commitment. Instead, members said they would consider funding an interconnection study promptly and return with a recommended governance and financing plan if the study shows no disproportionately expensive grid upgrades.

Provenance: The details above are based on Messier’s presentation and the assembly’s questions (transcript segments beginning with SEG 856 and the technical discussion through SEG 1867).