On a backdrop of rising fuel prices, the solar project is expected to help the power utility maintain competitive energy rates this year. Holyoke Gas & Electric said the solar project will not involve added costs for its 18,000 customers.
Project developer Constellation said it expects the 4.5MW solar project to reach commercial operation towards the end of this year. It will build, own and maintain the system, selling all the electricity generated under a 20-year power purchase agreement to Holyoke Gas & Electric at a fixed cost, which it said is below market rates.
James Lavelle, manager of Holyoke Gas & Electric, said, ‘Through this solar power purchase agreement with Constellation Energy, we are able to ensure affordability and price stability for our customers, and promote Holyoke as a more attractive location for new and existing industry, with no upfront capital expenditure.’
Solar power is becoming increasingly attractive to mainstream electricity consumers as it is moving towards cost parity. Industry analysts World Street Fundamentals showed in a recent analysis that the solar market is on track to reach parity as early as 2012.
‘Large-scale solar generation is an attractive option for municipal utilities to manage volatile energy costs for their customers and meet renewable energy goals,’ said Michael Smith, senior vice president of green initiatives for Constellation Energy’s retail business.
The solar installation will incorporate 18,400 photovoltaic ground-mounted solar panels at two locations and is expected to produce nearly 5.5 million kWh of electricity each year.
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