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Consideration of request by the Sustainability Manager for approval to enter into a contract with Arch Electric for installation of solar photovoltaic arrays on five City buildings and approval to expend up to 10% of the 2026 funds in advance of approval of the 2026 capital improvement budget
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Submitted by:
Megan Conway, Sustainability Manager
Department:
Department of Public Works
A. Issue
In line with the goals of the 2020 City of Wauwatosa Energy Resolution to source at least 25% of all energy used for municipal operations from local renewable sources by 2025, reduce municipal greenhouse gas emissions 50% by 2030, and achieve carbon neutrality by 2050, staff seeks authorization to accelerate installation of rooftop solar photovoltaic systems on remaining municipal buildings to meet recently adjusted federal deadlines to secure federal funding from the Inflation Reduction Act.
The federal One Big Beautiful Bill Act (OBBBA/HR1), effective July 4, 2025, made significant changes to the Clean Energy Investment Tax Credits that provide 30% of solar photovoltaic project costs to municipalities and other public entities through the elective pay mechanism. While solar would still be a cost saving measure for the City over the life of the system without federal funding, there is an opportunity for substantial savings (over $175,000) through meeting these accelerated deadlines. Additionally, PSC-approved electricity rate increases will drive up utility costs again next year, increasing taxpayer savings with on-site renewable energy generation.
B. Background/Options
The City of Wauwatosa has invested in solar photovoltaic systems across our municipal buildings resulting in reduced greenhouse gas emissions and lower electricity costs. There are five remaining municipal buildings that have solar-feasible rooftops that do not yet have solar systems installed - Fire Station 51 (1610 Underwood Avenue), Fire Station 52 (4187 N Mayfair Road), Fire Station 53 (10525 W Watertown Plank Road), Fire Training Building (11100 W Walnut Road), and Hart Park Administration Building (7300 W Chestnut Street). Installing solar on these remaining buildings would be a notable achievement for the City of Wauwatosa and make significant progress toward our climate action goals.
In order to remain eligible for the 30% federal cost reimbursement through the Clean Energy Investment Tax Credits for commercial solar under the new timelines and supply chain parameters established with OBBBA/HR1, we must commence construction on a significantly accelerated schedule. To qualify, the project must be under contract and at least 5% of the total project cost paid before January 1, 2026.
A request for proposals for rooftop solar photovoltaic systems on the five remaining buildings was issued on August 14, 2025 and three proposals were received on September 9, 2025. Proposals for the five systems ranged in size from 247.07 to 268.47 kilowatts (kW) and ranged in cost from $577,135.00 to $586,302.50. City staff reviewed the proposals and considered many factors including system size, cost, installer experience, component selection, and demonstrated understanding of shifting federal requirements and timelines to ensure eligibility for the Inflation Reduction Act 30% credit. After considering these factors, staff recommend the City enter into a contract with Arch Electric. Arch Electric has proposed the lowest cost per kW of solar photovoltaic system and a timeline that will allow us to receive federal funding before the accelerated deadline takes effect.
Proposal from Arch Solar:
|
|
Fire Station 51 |
Fire Station 52 |
Fire Station 53 |
Fire Training |
Hark Park Admin |
|
Project Cost |
$212,034.00 |
$131,353.00 |
$146,571.00 |
$34,749.00 |
$60,084.00 |
|
Federal Credit* |
($63,610.20) |
($39,405.90) |
($43,971.30) |
($10,424.70) |
($18,025.20) |
|
Focus Incentive |
($5,002.00) |
($2,691.00) |
($3,393.00) |
($643.50) |
($1,122.00) |
|
Net City Cost |
$143,421.80 |
$89,526.10 |
$99,206.70 |
$23,680.80 |
$40,936.80 |
|
Annu. Elec. Saving** |
($11,538) |
($7,490) |
($10,056.00) |
($1,206) |
($3,232) |
|
Payback Period |
11.1 years |
10.7 years |
9 years |
16.5 years |
11.3 years |
|
Array Size (kW) |
100.04 |
53.82 |
67.86 |
12.87 |
22.44 |
|
Elec. Use Covered |
36.99% |
100% |
93.85% |
100% |
59.63% |
Total Project Summary
- TOTAL Arch Electric Project Cost: $584,791.00
- TOTAL Federal Credits*: ($175,437.30)
- TOTAL Focus on Energy Incentives: ($12,851.50)
- TOTAL Net City Cost: $396,502.20
- TOTAL Annual Electricity Savings (Year 1)**: ($33,522.00)
- TOTAL Solar PV Size: 257.39 kW
- TOTAL Electricity Use Covered (across these five buildings): 59%
*The end-date for Inflation Reduction Act Clean Energy Investment Tax Credits has been accelerated with the passing of OBBBA/HR1. The City of Wauwatosa will need to commence construction on remaining solar projects by the end of 2025 to receive these credits.
**Annual savings calculated from 12-month historical energy usage and current electricity rates, savings are expected to increase with approved utility rate increases
C. Strategic Plan (Area of Focus)
Priority Area Three: Infrastructure
Priority Area Five: Quality of Life
D. Fiscal Impact
The total cost of installation is proposed at $584,791.00 with $188,288.80 in credits and incentives ($175,437.30 in federal tax credits and $12,851.50 from Focus on Energy) resulting in a net cost to the City of $396,502.20. Due to recent changes established in the OBBBA/HR1, projects that commence construction after December 31, 2025 will lose eligibility for the federal tax credits.
The annual electricity savings once installed and commissioned are expected to be $33,522.00 based on 12-month historical electricity use data and current electricity rates. Annual savings will increase with future electricity rate increases.
E. Recommendation
Authorize entering into contract with Arch Electric for rooftop solar photovoltaic installations on Fire Station 51, Fire Station 52, Fire Station 53, Fire Training Building, and Hart Park Administration Building and securing 30% federal credits by commencing construction in 2025 in advance of approval of the 2026 Capital Improvement Budget.