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The Albert Lea City Council on Monday approved entering into an about $19,600 agreement with Apex Facility Solutions LLC for the preliminary design of solar arrays at both the city’s wastewater treatment plant and hockey arena.

City Engineer Steven Jahnke said the city had evaluated the feasibility of a solar field at the treatment plant for some time and with the inclusion of federal tax credits and a potential federal grant, the project would be feasible.

The 475-kilowatt array being considered at the plant would be built on two acres of land on the north side of the property and would produce the equivalent of $70,000 of electricity a year. Currently, Jahnke said the city pays between $35,000 and $40,000 on electricity per month at the plant.

He presented two possible cost options, depending on the approval of the federal grant. He said the total cost estimate is $1.5 million, and the $1 million grant would depend on the federal government passing a budget and then allocating funds to the project.

If the city was able to get the $1 million grant and then apply the 40% tax credit, the net project cost would be $300,000. Otherwise, without the grant and only the 40% tax credit, the cost would be $900,000.

The array is expected to generate $70,500 in electricity the first year of the project and expand to about $123,000 in year 20, based on an assumed 3.5% in electricity rates over the next 20 years.

Greg Ackerson with Apex said if the project is financed through Apex, the company guarantees both the cost and the performance.

The solar panels at City Arena would be mounted to the roof of the Colstrup Arena and generate 208 kilowatts of electricity, covering about 21% of the arena’s current electricity use, said Cathy Malakowsky, director of community engagement and enrichment.

The cost estimate is about $447,000 and after the 40% tax credits, would be about $268,000.

Malakowsky said the first year after installed the panels would generate about $18,200 in electricity, and by year 20 would generate almost $32,000 in electricity.

She noted the city would be in the negative on the project until the fifth year and by the 14th year of the project will have paid for the system.

The wastewater treatment plant and the arena are the city’s two largest users of electricity with the arena spending almost $460,000 annually and the arena spending almost $132,000.

A few of the councilors asked if the roof at the arena could handle the weight of panels and how they will perform in the winter with snow.

Askerson said Apex would conduct a stress test as part of the preliminary study for the project to make sure the roof can hold the panels.

He said the rooftop panels would be at a 10- to 15-degree angle , which does give up some production, though he noted the ground-mounted panels proposed for the treatment plant would be at a 32-degree angle.

City Manager Ian Rigg said it had been looked at to build a ground-mounted array at the arena but the cost to do so would eat away at the payback and make it cost prohibitive.

The council will vote on the final design after preliminary engineering is completed.