ASHLAND — Although taken aback by a proposed utility rate hike, long payoff time and expensive energy produced by a proposed solar array, Ashland officials hope to move forward with an $800,000 system that would allow residents to buy shares — and shift the city toward energy independence.

ASHLAND — Although taken aback by a proposed utility rate hike, long payoff time and expensive energy produced by a proposed solar array, Ashland officials hope to move forward with an $800,000 system that would allow residents to buy shares — and shift the city toward energy independence.

The city recently won approval from the federal government to sell $500,000 in Clean Renewable Energy Bonds and is hoping for a $300,000 state Business Energy Tax Credit for the project, which would be built atop the roof of a large storage building, behind the City Hall parking lot on East Main Street.

City residents would be able to buy about 375 shares (at $1,000 each) in the Community Solar Program, paying $8.50 a month for 10 years on their utility bill for each share. They could buy up to 10 shares and would get a credit on their bill from power produced by the array.

City Electric and Telecommunications Director Dick Wanderscheid has asked the City Council to approve the project and the bond sale, also suggesting the city subsidize the project at $27,000 a year for 10 years, which would lower payback time from 60 years to 23 years.

To do that, the city would have to raise utility rates by about 27 cents per $100, Wanderscheid told the council.

Saying they liked the project but had too many questions about its expense, complexity and long payback time, council members on May 15 backed off on approval and set up a study group with Wanderscheid and council members David Chapman, Alice Hardesty and Kate Jackson.

"To be honest, it's an experiment to see if people, environmentally, will put their money where their mouths are. Our investors are the people who want to do the right thing and be solar," Wanderscheid said.

The system would produce 130,000 kilowatt hours a year, about three-fourths of 1 percent of the city's need.

Ashland residents proved to be strong supporters of solar energy, buying shares when the city put up solar arrays on the buildings of the city, Southern Oregon University and Oregon Shakespeare Festival. But if enough residents don't buy into the new system, Wanderscheid asked that the city be the default purchaser of the shares.

"There are too many questions," said Jackson. "I would like to see it go forward and I wholeheartedly believe the community needs to look at additional energy sources, but I'm befuddled by the numbers. It's very expensive, but we know rates are going to go up."

Jackson also questioned the wisdom of taxing all residents, when only a small number are actual owners of the array.

A big plus of the program is that it allows the average resident, who may not have good solar access or the money to buy an array, to buy part of a solar system, receive some green energy and help the planet, said Chapman.

"But the red flags for me are that I hoped the kilowatt hours cost the same as what you put on your roof (after credits and grants), but it was higher."

The city is at a disadvantage because it can't use federal and state credits at the same level as individuals, he said, noting that he hoped to resolve those differences in the work group.

Councilman Eric Navickas said he supports the city's investment in solar. "It's a good program and we shouldn't be afraid of a minor increase in the utility rate."

Hardesty said the utility hike was a caution "but it's only a few cents a month and people will understand it's for the good of the city and everyone. The more energy we can generate, the less dependent we are on BPA (Bonneville Power Administration). Their rates look like they're going up a lot."

Officials said they didn't expect a protest, such as happened when the city, several years ago, passed a significant utility rate hike to pay for Ashland Fiber Network, but Wanderscheid said, "I'm sure, no matter what you do in this town, there's going to be someone against it."

The city received bids for building the project but they were below standards and the project has to be re-bid, said Wanderscheid. With council approval, much of the array could be online by late summer, he said.

John Darling is a freelance writer living in Ashland. E-mail him at jdarling@jeffnet.org.