According to the Massachusetts Department of Energy Resources, more than two-dozen communities across Massachusetts are in process to convert these eyesores into solar energy farms. The state’s Energy Secretary, Richard Sullivan, says that if developed correctly, these solar projects can help local residents reduce their energy bills and generate revenue for cities. Other than the short term cost of building a solar farm, the long term cost for a solar farm is very low as the cost of fuel for a solar farm is zero. On the other hand, approximately 80% of the total cost of fossil fuel energy facilities is due to fuel acquisition costs which is also subject to price volatility due to spikes in global demand. As a result, local residents will be able to access electricity at a lower rate over a longer period of time with much more price stability from a muncipally owned solar farm than with fossil fuel plants.
These solar farms also have tremendous value when factoring in Massachusetts’ Solar Renewable Energy Credits (SREC) system. A SREC represents 1 megawatt-hour of electricity generated from an eligible renewable energy source. Just like stocks, SRECs are sold on an open market at varying prices correlated to demand. Utilities need to buy a certain amount of these credits to comply with a state’s renewable energy requrements. Dwayne Breger, the director of the renewable energy division at the Massachusetts Department of Energy Resources says prices for the solar renewable energy certificates can go as high as $550, ten times that of other renewable energy credits. Solar farms can help in producing these SRECs in large for utilities to purchase in order to comply with the states renewable energy requirements. This in turn can provide an additional source of revenue for the local municipality with the solar farm.
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