Photo courtesy City of Sarasota: St. Armands Garage.

Would you spend $211,000 today to save $150,000 over 25 years? Of course not. But it appears the City of Sarasota did just that with the new installation of solar panels on St. Armands parking garage.

Jerry Wells is a retired commodities trader with a keen understanding of energy markets. He serves on the City’s Parks, Recreation and Environmental Protections (PREP) Advisory Board.

Unfortunately, Wells’ expertise in solar energy markets has not been utilized by the City’s Sustainability office, and he’s got lots of questions about the City’s renewable energy investment.

“Why do we have to be the village idiot?” asks Wells.

Comparison shopping for solar energy raises red flags. Wells shared a cost estimate for solar panels for his home. For a 4.5 kW installation, the price Wells was quoted from a local vendor was between $10,000 and $12,000. The City of Sarasota’s solar installation is 35kW and cost $211,000. That’s over triple the rate Wells’ was quoted for a residential solar. As a trader in solar energy, Wells says commercial solar costs less, not more, than residential. Wells’ says the City overpaid significantly for the St. Armand’s solar installation.

At the unveiling of the St. Armand’s garage, the City’s sustainability manager, Stevie Freeman-Montes, was asked why they chose to go with solar power for the project.

“It’s free! The sun is free, it’s good for the environment," said the City’s sustainability manager, Stevie Freeman-Montes. "We’re trying to help the transition away from fossil fuel energy.”

Sounds good, but this project wasn’t free. Where are the expected savings from solar power?

The City’s expects the solar panels to reduce energy costs at the garage by $6,034.70 per year. Given the project’s high cost, it will take 35 years for City taxpayers to recoup their investment ($6,000 x 35 = $210,000). A project with a 35-year ROI is unacceptable.

But the system is under warranty for 25 years. In 25 years, the energy savings is $150,000—not enough to cover the project cost. Wells says it’s unreasonable to expect performance beyond 25 years, and that Florida heat is tough on solar panels. “This is what I do in business,” Wells told me. “In the private sector, a fair return on a solar investment is 8-10 years”.

Unfortunately, the City’s savings estimate assumes energy production of the system will not degrade. But solar panels degrade a bit each year. Realistic energy savings estimates include reduced energy output. The real return on investment here is longer than 35 years.

Finally, St. Armand’s solar panels do not store energy in a battery. Unused energy is given back to the grid (Florida Power and Light, FPL) in a Net metering trade. When the panels aren’t generating power with sunlight, the garage’s power needs are met by FPL. “When do you need to light up a garage?” Wells asked me. “When is the energy really needed?” “At night” I replied. Uh-oh.

Wells says the City could have purchased over three solar power systems for the price of this one, and installed them at facilities like Robert Taylor Center and City Hall. These buildings have high daytime power demand, when solar panels are active. During the evening, when solar panels aren’t producing, these facilities are closed.

This is just simply a bad deal for the city.

Cathy Antunes is host of The Detail.

Photo courtesy City of Sarasota: St. Armands Garage.