The state’s “solar carve-out” energy credit program has led energy generators to seek city- and town-owned land and buildings as the sites for solar-power generation, creating cost-saving opportunities for municipalities that host the sites, according to the Department of Energy Resources.

Cities and towns offer significant advantages to energy-generating companies, including serving as a buyer of their product and offering land and buildings that would be suitable for solar arrays, according to Natalie Andrews, the DOER’s renewable energy project coordinator.

The state’s Green Communities Act requires utilities to include renewable energy as part of their overall portfolio. The solar “carve-out” refers to the portion of renewable energy that must come from solar generation.

The carve-out, according Andrews, provides a strong incentive for utilities to buy solar energy. If they do not, they must purchase renewable energy credits, at a higher price, from utilities that use alternative energy sources.

Solar energy companies receive the renewable energy credits and sell them on the open market. By doing this, they are able to enter power purchase agreements with municipalities at a rate that is subsidized by the renewable energy credits. In their marketing materials, solar-generating companies say they can guarantee a 15 percent discount below market rate over the life of a solar installation.

Solar companies also are in position to qualify for federal stimulus money and federal tax credits.

Andrews, who met with the MMA’s Policy Committee on Energy and the Environment on Sept. 15, noted that the power purchase agreements involve no capital costs on the part of the municipality. Municipalities, however, should follow standard procurement procedures and review all agreements with legal counsel, she said.

For more information, contact the Department of Energy Resources at (617) 626-7300.

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