The South Korean company Solvine plans to invest $6 million in a 500-kilowatt concentrating solar thermal generating system to power the city of Belen’s wastewater treatment plant.
Andrew DiCamillo, Belen’s planning and economic development director, said a Solvine delegation visited the plant April 21 to survey the 4-acre area where the system will operate and finalize logistics with the city. “It’s not a done deal yet, but we’re about 90 percent there,” DiCamillo said. “We just have some final logistics to work out.”
The system will be manufactured by Washington-based Infinia Corp., which installed a 3-kilowatt “PowerDish” at Belen’s City Hall last year. The PowerDish uses solar heat to run a Stirling engine. The system produces a pressure pulse, which activates an alternator to generate electricity. Solvine has concluded talks with Infinia to buy the system, DiCamillo said.
“We expect Solvine to break ground in the coming weeks and have the system up and running by the end of summer,” he said. “The company already sealed the deal with Infinia. The site visit this week was to get Solvine fully on board with the city, and it seems we met all their expectations.”
Solvine will install and operate the system for six years under a third-party power purchase agreement. In the seventh year, Belen will buy the system back from Solvine for $2.7 million.
Such arrangements are becoming common in the solar industry, because they resolve the inability of government institutions and nonprofit organizations to access state and federal tax breaks when installing solar systems.
Under a third-party agreement, the developer owns the system and accesses the tax breaks. The customer — in this case the City of Belen — ends up paying much less for the solar energy produced than would otherwise be paid to Public Service Co. of New Mexico for energy from the grid.
The third party benefits by accessing the tax breaks and the renewable energy credits, or solar incentives, that PNM pays to solar-system owners for the energy they generate.
Although the application for those credits is still pending at PNM, DiCamillo expects Solvine to earn 10 cents per kilowatt hour from the utility. When the city takes over the system, those REC payments will revert to Belen.
The solar system will supply all the power needed to run the wastewater treatment plant when the sun is shining, DiCamillo said. The plant serves more than 3,500 homes and all businesses and government buildings in Belen.