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Tesla out of Tonawanda solar farm; Solar Liberty set to take over

Three years ago, SolarCity agreed to install 8,500 solar panels on the Town of Tonawanda's former landfill.

Within a year, the project had stalled. It remained in limbo after Tesla acquired SolarCity and assumed responsibility for both the solar farm and a sprawling solar factory in South Buffalo.

Now, the Palo Alto, Calif., maker of electric cars and solar panels wants to get out of its deal with the town and hand the project to a local contractor. The Town Board is set to approve the agreement with Amherst-based Solar Liberty on Monday.

The town would not pay anything toward construction of the solar array, but purchase all of the energy it produces over the next 20 years.

That would help cut the town's electricity bill — though not as much if the system had opened when scheduled — and help the environment as a new source of renewable energy.

"It's still better than a stick in the eye. It's still savings," Town Engineer James B. Jones said. "And what else are you going to do with a landfill? So it's still a good thing, it's just not that great a thing."

Site of the Town of Tonawanda landfill.

The project targets a 10-acre section on the eastern side of the town's former landfill, which closed in the late 1980s. The property is just to the west of Military Road and just north of the Youngmann Memorial Highway.

The town sought bids for the solar project in 2015 and selected SolarCity from among a half-dozen companies. Thanks to state clean energy incentives, the town expected to save $183,000 on its $2 million annual electricity bill.

The project hit a snag, however, when National Grid informed SolarCity and the town that the California company would have to install specialized equipment to ensure the safety of the utility's network. Jones said SolarCity and the town negotiated with National Grid to reduce the cost of this equipment.

Plan to install solar panels on Tonawanda Landfill is delayed

Around the same time, Tesla completed its acquisition of SolarCity. Jones said Tesla never moved forward with the solar array, and this year informed the town it wanted to break the agreement.

The town could have taken Tesla and its CEO to court but, "we would have been in line with everyone else trying to sue Elon Musk, you know?" Jones said.

So the town tried to salvage the project, and convinced Solar Liberty to consider taking over from Tesla.

Negotiations between the companies started in March and they reached an agreement last month.

Solar Liberty in 2009 and 2010 installed solar arrays on five town buildings, including the senior center and the highway department, Jones said.

SolarCity originally agreed to install 8,500 solar panels, but because panels today are more efficient, Solar Liberty plans to install slightly fewer than 8,000 panels for the same 2-megawatt capacity, said Nathan Rizzo, Solar Liberty's vice president.

The cost of installation is just over $4 million, Rizzo said. Construction would start in the spring and take three to four months.

"We want to provide the best system, the best project to the community," Rizzo said.

The town would pay more for the electricity produced at the site, in part because state incentives aren't as lucrative today, Rizzo and Jones said. For example, the town would pay 8.9 cents per kilowatt hour in the first year of the 20-year agreement, instead of 6.5 cents under the original agreement.

Under the new rates, Jones said the town would save about $60,000 on its electric bill.

A Tesla spokeswoman declined comment on Friday.

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