Schuylkill County’s Airport Authority is asking the County Commissioners to guarantee a portion of bond financing it needs to install a 3 megawatt solar array at the airport.
The Airport Authority told Commissioners on Wednesday that it believes this project could help it achieve financial self-sustainability.
“The authority has determined that this proposed solar project can help achieve that objective,” Authority Solicitor Marty Cerullo said.
Each year, the County provides supplemental funding to Schuylkill County Airport to keep it afloat. Recent subsidies have ranged from $110,000 to $210,000.
The solar project at the airport is expected to cost nearly $8.5 million to construct. Quandel Energy Solutions, which is constructing the array, estimates it’ll produce 4.9 million kWh of electricity.
The array would not be located near the actual airport so as not to hinder any potential future growth of that facility, the Authority said.
If the solar array works as it’s believed it could, Cerullo said the County would not have to subsidize the Airport Authority beyond 2027.
The County would not be guaranteeing the full loan, only the reserve fund designed to make loan payments in case the solar array fails to generate expected revenue.
The bond financing guarantee would be with respect to the annual debt service reserve fund, Cerullo told Commissioners on Wednesday. The Airport Authority is asking County Commissioners to guarantee $585,000 through a Debt Service Reserve Fund.
Cerullo said the Authority believes it’ll never have to call upon the Commissioners for that guaranteed reserve to pay off a loan.
However, without that guarantee from County government and several other variables, the project can not move forward, the Authority says.
“Solid Financial Footing”
Scott Kramer, a managing director at Raymond James, which is financing the solar project at the airport, said the goal is to get the Airport Authority on “solid financial footing.”
The proposed solar project is expected to qualify for $2.687 million in federal investment tax credits (ITCs) — a type of financial incentive that helps reduce the cost of clean energy projects.
The Authority says $1 million would go toward immediately paying down debt. Currently, the County is still owed $453,800 by the Airport Authority on two loans taken out in the last 11 years to extend the runway at the airport and to construct a hangar.
This would clear out those debts to the County.
The remaining $1.687 million would be put into a reserve fund. That money would be invested to help generate extra income for the Airport Authority.
“The Authority should be on its own two feet and producing excess cash flow over and above the debt service on the bonds,” Kramer said. “The cumulative solar cash flows over the life of the solar array are just shy of $13.5 million. Each and every year after the array is up, we’re expecting significant cash flow to bolster those reserves we’re putting in place up front to further insulate the County from ever needing to draw on that Reserve fund.”
Variables That Could Kill the Project
Outside of the Commissioners saying no, that they won’t approve guaranteeing that debt reserve fund for the Authority, which seems unlikely to happen, there are other factors that could put a halt to this solar array project.
First, if tax legislation at the federal level were to change and the tax credits that are being banked on to make this a viable project were to go away, the solar array idea would be scrapped.
This project also hinges on PPL Corp. allowing it to be plugged into its grid. Shawn Nicholson, the director of project development at Quandel Energy Solutions, told Commissioners last week that an application to plug in has been submitted to PPL and its awaiting approval.
“We’ve been in communication with them and don’t see any issues at this time,” he said.
Solar Renewable Energy Credits (SRECs)
Kramer said the Airport Authority is considering selling its Solar Renewable Energy Credits (SRECs) up front and generating about $600,000 in revenue.
An SREC is a tradable credit that represents the environmental value of the electricity generated by a solar energy system. Each 1,000 kWh of energy produced by a solar array earns it 1 SREC that can be sold.
SRECs are often sold to utility companies to help them meet state renewable energy mandates.
Potential Conflict of Interest?
During Wednesday’s Commissioners meeting, Cerullo responded to some criticism regarding a potential conflict of interest between the Authority and the company it’s chosen to construct the array, Quandel Energy Solutions.
That company’s principal owner, Bud Quandel, is a former member of the Airport Authority Board of Directors.
Cerullo explained that the Authority selected Quandel through a state-approved Guaranteed Energy Savings procurement process. This process involves a request for qualifications, not a traditional bid, and “several proposals” were received in 2024 before Quandel was selected.
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