To the editor:

Solar Project Not Good Investment

Capital investment in business or in government should be evaluated as to what it will return. From an economic aspect, the information recently presented regarding a proposed solar project shows it to be a very bad investment.

There are some sophisticated formulas for figuring return on investment that could be used, but let us just look at some simpler logic.

The initial bid for the project is $6.7 million. The estimated saving after 25 years is $4.8 million. That is a loss of almost $2 million over the warranty life of most solar panels. What if the $6.7 million was invested for a 2.5 percent rate of return? Well it would be worth about $12.4 million at the end of the 25 years. Over $14 million compared to the $2.0 million loss for the solar investment.

But wait! — We can borrow the money for the solar project by issuing Municipal Bonds. The only problem is that we will have to pay them back with taxpayer money. The going rate for municipal bonds for AA rated Municipalities is about 3 percent. Over the course of the 25 year term, the loan payoff will cost over $9.5 Million. Not a very good deal for a $4.8 million in savings.

Fortunately the city is going to look at other bids, but they should also look at the scope of the project. Other factors that need to be considered: Changing city lighting to LED will cut the electric bill substantially and that will reduce the expense saving from solar panels. Solar panels might be more justifiable with lower cost installations at locations where they could be utilized like on the city building or at the waste water treatment plant. A big solar farm at Freeman Field will require a costly transmission infrastructure and reduce city income from the rented farm land.

Bids for the solar project will come from companies that are happy to sell the city the biggest and most expensive project possible. That may be good for the solar panel company but not for Seymour. A better plan would be to have a knowledgeable consultant (independent of the solar panel companies) look at ways to save on city energy costs. Hopefully such a study would allow the city to concentrate on saving and not just spending.

Berl Grant, Seymour