Salisbury is target for solar projects

Thompson Design Group of Boston hopes to convert 100 acres of wooded land in Salisbury into a renewable energy park with enough solar panels to produce up to 6 megawatts of electricity, enough to power as many as 1,500 homes.

The energy project, which could also include some wind turbines, would be the largest solar power facility in the state, designed to provide more than enough electricity for another Thompson project: an ambitious, but stalled, plan to redevelop the Salisbury oceanfront district, with up to 3 million square feet of housing, hotel rooms, recreational facilities, and infrastructure to shore up the town’s battered barrier beach.

Although the company is pursuing the solar park independently, the combination of the energy project and the mixed-use development forms “a unified development program,’’ said Jane Thompson, principal of the design group, which has worked on such projects as Faneuil Hall in Boston and the market at Union Station in Washington, D.C. “The development world has been trying roof panels and green roofs, just reaching for individualized power solutions. Now it’s time to take a much bigger and innovative view.’’

Salisbury businessman James Vaughn has proposed another solar farm, also designed to produce 6 megawatts. He plans to locate the project in a 54-acre industrial park that has failed to attract business tenants, and hopes to be generating elec tricity by the end of the year. “I’ve been told since day one that this can’t be done, but I’m very optimistic,’’ he said, adding that the oil spill in the Gulf of Mexico has generated more interest in solar power.

Both projects face daunting obstacles. For more than three years, RECommerce LLC, Thompson’s development division, has been assembling land for the beachfront development, and although it has options on most of the necessary properties, some of those agreements date back three years and face renewal deadlines, and there are no deals for several key parcels.

Neil Harrington, Salisbury’s town manager, said his town is a good fit for solar power. Major power transmission lines run through town, it has large parcels of flat land with southern exposure, and many residents prefer low-density development. “A quiet solar farm in the middle of the woods is perfect,’’ he said. “In less than a year, we’ve gone from not even thinking about solar to two major proposals.’’

Vaughn said he’s considering several options to finance construction of the project, although they depend upon a complicated array of state and federal tax credits and other incentives. “I’m juggling chain saws,’’ he said. He and Thompson each have to raise enough money for construction of their solar projects, and are seeking contracts with utility companies willing to buy the power they will generate: a guarantee of future income, which is key to attracting investors. In February, RECommerce submitted proposals to all four of the state’s major investor-owned utilities, but none of the power companies offered a deal.

Another hurdle is the fast-approaching deadline to qualify for a federal tax incentive that the project developers said is critical for attracting financing. At the end of the year, the federal program will convert from a tax grant to an investment tax credit, which would be significantly less attractive to investors. The federal tax grant “is paramount to financing,’’ Vaughn said.

The Salisbury projects must also be able to offer credits for power purchased from renewable resources, which electricity suppliers in Massachusetts can buy to help meet state clean-energy mandates. However, current state law limits the credits, known as Solar Renewable Energy Certificates, to solar projects with no more than 2 megawatts of generating capacity.

Both developers are considering breaking up their proposals into smaller, independent units that would come in under the limit, but Robert Keough, energy and environmental affairs assistant secretary, indicated that the state would take a dim view of that approach. “The regulations make it clear that the 2 megawatt limit would apply to a single parcel of land,’’ he said. “One piece of land is one project.’’

The state limit would make it “substantially more difficult’’ for a large-scale solar project in Massachusetts to attract financing, said Mark Williams, managing director of GSF Advisers in Boston, a financial consultant to RECommerce.

State Representative Michael Costello, a Newburyport Democrat, has filed a bill to raise that limit to 6 megawatts, although it is unclear if the change can be enacted soon enough for the Salisbury projects.

The Patrick administration has set a goal of producing 250 megawatts of solar energy in Massachusetts by 2017. Currently, the largest approved installation in the state is a 2 megawatt solar farm in Greenfield, and the vast majority of solar projects in the state are much smaller. Just last week, for example, the state announced a new round of federal stimulus funding to produce solar power at 46 locations across the state. Combined, the projects would produce a total of 3.8 megawatts, less than either of the Salisbury proposals.

Keough declined to say whether the state would support significantly larger-scale projects such as that proposed by RECommerce.

Though he recognizes the serious challenges ahead, Salisbury town manager Harrington said the plan to fully power the beachfront’s redevelopment with renewable energy generated on a separate nearby site “is transformative. I believe it is unprecedented for a real estate development of this size to be a net-zero-energy consumption project.’’