Marciante: "Nothing is Free" With Solar Energy Project

The Manalapan-Englishtown Board of Education has realized that they may be more financially liable for solar panels on their school roofs than they had initially thought.

As of Tuesday night's meeting, the Manalapan-Englishtown Board of Education is still considering options for financing a solar energy project that will help to pay for two new roofs at and . Some important questions regarding financing remain unanswered, and the district is facing a time constraint on a project proposed by the Monmouth County Improvement Authority.

“Nothing is free,” said Superintendent John J. Marciante during last night’s meeting. “You can get anything you want if you pay for it."

Since February 2011, Marciante has spearheaded the project to bring solar energy to the school district, and has run into many issues, including the of one project.    

After meeting with the Monmouth County Improvement Authority earlier this month, the Board is facing the daunting task of gaining a $10 million bonding guarantee from the Manalapan Township Committee by Oct. 6.

The total cost of the project and how much the school district would have to pay to fix a damaged roof remains ambiguous at this point.

Marciante compared the solar energy project to a pie. “It’s about how many panels you have and what you get [money] for your energy,” the superintendent said. If maintenance is done on the roofs, and if the roofs are built into the Request For ProposaL (RFP), you lose a piece of the pie.

Business Administrator Veronica Wolf agreed, saying that it is all about how a developer packages the project. The bond council for the County Improvement Authority is supposed to forward a resolution on the pricing of the project, but as of Tuesday Wolfe had not received the information.

Board President Michele Stipelman and Board Member Joseph DePasquale suggested bringing in more engineers for another estimate. Marciante said he will ask Board Attorney Sanford Brown to see if that is acceptable. However, he does not want to show preference to a particular company prior to accepting bids.

At the Board’s last meeting on Sept. 6, Brown questioned the consultant engineers working with the Monmouth County Improvement Authority as well as their attorney, Stephen Pearlman of Inglesino, Pearlman, Wyciskala and Taylor LLC of Parsippany.

According to Joseph Santaiti of the energy consulting firm Gabel Associations, if there was a serious leak, the school district would have to pay back the warrantor and the developer to fix the reinstallation of the system in that area of the roof.

“That’s why….it is so critical that you put solar on the roofs that are in good condition and new roofs that are being installed now or that have the longevity in them,” said Santaiti. He said that roofs that are 10 years-old or less are considered for installation.

During the meeting, it was also established that the costs of fixing the solar system are the responsibility of the developer until the switch is thrown; then, the Board of Education becomes responsible.  

Marciante wanted to know how much fixing a leak would cost, but was unable to receive a clear answer since leaks vary in size and severity. However, according to Pearlman, who supervises the RFP writing, there is a 10-day coverage of a minor occurrence that may temporarily shut down the power system. Any problem beyond 10 days would be the responsibility of the district.

In order to proceed, Englishtown and Manalapan have to adopt a guarantee of financing, said Pearlman. By law, the maximum amount in bonds issued cannot exceed $50 million, which means the project, which could include other school districts, must not exceed a certain size.  

The pressure stems from the fact that there is an expiring provision of the federal tax law, a 30 percent investment tax credit for solar energy projects. Since developers receive this tax credit, they therefore pass on the savings to school districts in the form of a lower estimate.

Therefore, the Monmouth County Improvement Authority is trying to push municipalities to agree to the project before the end of the year.

Before Dec. 31, there are two processes that need to be done. One is the RFP process for the developer and the other is the bonding process. Pearlman said the minimum amount of time for bonding is usually three months.

“I see that as somewhat problematic,” said Marciante in response to this news. Stipelman also said that she does not see the township council approving a bonding resolution by Oct. 6.

Moreover, it was revealed that while the MCIA is negotiating with Middletown, Eatontown, and Upper Freehold, those school districts have not yet committed.  

“We are not able to sit here at this moment to tell you who is fast-tracked and who is not,” said Doug Bacher a financial advisor with the MCIA.

Marciante had already reached out to the members of the Englishtown Council who are interested in meeting with the MCIA team and hearing a presentation; however, much of the financial guarantee would be the responsibility of Manalapan Township.

Pearlman confirmed that Somerset and Morris counties did not seek minimum guarantees from municipalities when they sought to install solar panels on schools roofs. And after Brown lead him to admit it, Pearlman also said that the team does not have experience with seeking municipal guarantees for these types of projects.

A Morris County school solar project was a pilot program during which many lessons were learned. He said that the MCIA's request for a financial guarantee stems from the fact that they wish to protect their credit.  

The team, which also includes engineer Gerard Genna of Birdsall Services Group, confirmed that the SREC market, which is a New Jersey subsidy, is volatile right now, which adds another element of uncertainty to the project.

It is unclear if the representatives will appear at tonight’s Township Committee to discuss the financing of the solar energy project. There is currently no mention of that presentation on the committee's agenda.

The Board of Education has yet to formally vote in approval of the MCIA's proposal.