A State Solar Mandate Is Still Producing Very Spendy Electricity

Projects will take many decades to pay for the public investment in their solar panels.

A new report to the Oregon Legislature shows that a solar power mandate for publicly funded building projects continues to generate some very costly electricity.

In 2007, to promote solar energy, legislators mandated that public agencies must spend 1.5% of construction or renovation costs on solar power generation. They have tweaked the bill several times since.

Jerry Milstead, a project manager who has advised local governments on such projects, says the requirement can result in “very expensive” projects with little environmental benefit.

The new $325 million Multnomah County Courthouse, as WW previously reported, includes a $1.47 million solar energy system that produces savings of $13,424 a year.

That means the solar equipment will pay for itself in 109 years, an investment Milstead calls “ludicrous.”

Other assessments of the program are more measured. Ryan Vandehey, a spokesman for Portland Public Schools, which completed two big projects last year, says changes to the original law have improved it.

“The mandate is good policy in theory,” Vandehey says, “and the Oregon Department of Energy has made updates and revisions recently to make it more reasonable.”

John MacLean, the finance and procurement manager at Portland Community College, which completed four projects last year, also applauds the principle of the law but says it might be better to set efficiency goals rather than mandate expenditure levels.

Milstead agrees. “Public dollars are precious,” he says. “We should treat them that way.”

The good news: Some of the payback periods in the 2022 Oregon Department of Energy report are shorter than in the past. The new solar installation at Portland’s Kellogg Middle School, for example, will pay for itself in less than 22 years. (That’s still far longer than commercial installations, which, with incentives, can pay off in five years.)

Here are three large 2021 projects with long payoffs.

Ogden Middle School, Oregon City

Total cost

$41.5 million

Solar cost

$634,000

Yearly energy value

$6,000

Years to pay back

106

McDaniel High School renovation, Portland

Total cost

$142 million

Solar cost

$2.14 million

Yearly energy value

$33,000

Years to pay back

65

PCC Workforce Training Center, Portland

Total cost

$33.8 million

Solar cost

$551,000

Yearly energy value

$8,640

Years to pay back

64

Source: Oregon Department of Energy