Central Lee grabs at solar project

DONNELLSON – The Central Lee school board is moving forward with a quick-turnaround project with Mohrfeld Solar to install solar panels on district property in the next year.
Michael Mohrfeld, President of Mohrfeld Solar, and Terry Dvorak, with Red Lion Renewables of Norwalk, Iowa spent close to an hour pitching the project to the board Tuesday morning.
The project would involve arrays of solar panels on some of the land on the northeast part of the campus as well as some building top panels and possibly a carport with panels on top.
The project would create almost a net zero metering for the district, which means almost all of their electrical needs would be met by energy produced by the panels. There still would be minimal electricity purchased from Alliant, but the district could see savings of close to $60,000 per year during the 20-year agreement with Mohrfeld and Red Lion.
Red Lion would be the investor in the project and would pay for all the equipment and installation and would recoup those costs over about seven years as the district purchased energy from Red Lion in a Power Purchase Agreement.
Red Lion also has been involved with multiple other collaborations with Mohrfeld’s to install solar for other public agencies including Lee County, Southeastern Community College, and Keokuk schools among others.
Dvorek said he sets up an LLC for the agreement and then solicits investors to help fund the project. Those investors generate a return on the markup of the electricity being sold to the district. He said he typically buys out the investors after about six or seven years and then owns the LLC for the remainder of the contract and any extensions. Federal tax credits that accompany projects like this are set to expire June 30, 2026.
Red Lion contracts with Mohrfeld for any maintenance work and upgrades for the duration of the 20-year agreement.
Mohrfeld said the timeline was short to move on the project because Alliant Energy requires 90 days to review all applications, and to qualify for the tax credits, he has to be moving dirt before July 1.
The board informally said they wanted to move forward with the plan, however, no official vote was taken on the project. Since the agreement is technically a service contract between Red Lion and the school district, the project does not need to be bid out to other solar vendors.

“Basically it says you’re allowing me to put my equipment on your property, so there’s a lease for that. And then we have a power purchase agreement for the next 20 years to provide the power at the contracted rate,” Dvorek said.
“That will go up 2.5% per year because that seems to be the best and you’ll have options to buy it down the road after all the tax goodies are done. So at year 6 at xx amount of dollars, year 7 for less dollars.”
Dvorek said at the end of the 20 years, the district would have the option to extend the agreement in five-year increments. Or they can say they don’t want the system anymore and Red Lion would remove everything but the underground conduit. Mohrfeld Solar would do all the installation work.
Mohrfeld said Red Lion is selling electricity to the district and, if something breaks, Red Lion can’t sell as much electricity so Dvorek would want that fixed as soon as possible. Any extra electricity produced can be sold back to Alliant Energy.
“When they are covered with snow that’s really his frustration, not yours. He wants to see the system up and running,” Mohrfeld said. “So if an inverter goes down, he’s very quick to call us because that’s lost revenue for him.”
Mohrfeld said some districts don’t want to own the system so they keep extending contracts, but Mohrfeld said with the district being so close to his company’s location and services, that conversation may want to be on the table at the end of the 20 years.
With the direction of the board being to move forward, Dvorek said he would develop a contract and get it front of the district’s attorneys going forward.
Mohrfeld said the district needs to be aware of the demand of energy in the next five years is up in the air, substantially due to the emergence of data centers.
"The way data centers are coming online right now, they don't have a strategy to power what's in front of them for the next five years," he said.
"You can say with relative confidence that's going to be passed on to the rate payer."