Port solar project might not see light of day

A State Ports Authority proposal to build a rooftop solar farm, similar to one at Boeing Co.’s North Charleston campus, is drawing scrutiny.

The region’s second-largest solar power project could be built atop one of the State Ports Authority’s warehouse roofs, but the plan is drawing scrutiny from the agency’s board because of potential financial concerns.

The SPA staff wants to place a solar panel facility on top of a warehouse at the Wando Welch Terminal in Mount Pleasant in a partnership with SCANA Corp., parent company of South Carolina Electric & Gas. At 1.2 megawatts, the project would be about half the size of the area’s largest cluster of solar panels atop Boeing Co.’s 787 plant in North Charleston.

“It was an environmentally responsible thing that we thought made sense to do,” Jim Newsome, the SPA’s president and CEO. said during Wednesday’s board meeting.

The cost was not disclosed, although it would take 22 years for the agency to recover its investment while a monthly power bill credit would cover interest costs. The SPA would purchase the panels from Charleston-based SolBright Renewable Energy.

The proposal won’t be up for a vote until next month, but some board members already are balking at it.

“Before we approve this, can we actually see the details of this payback because this is an unbudgeted project and we’ve got $1 billion we’ve got to spend in the next five to 10 years,” Kurt Grindstaff said. He was referring to big-ticket projects the SPA is undertaking, such as construction of a new container terminal in North Charleston.

Grindstaff, chief financial officer of DBH Global Inc. in Hilton Head, said he is concerned that the SPA’s operating expenses are growing faster than revenues while the number of cargo containers moving through the Port of Charleston is on a seven-month decline.

“I think we need to look at this very seriously,” he said.

Newsome called the decline “a blip” and said he expects cargo to rebound in coming months as the port enters its seasonally strong stretch. Projects such as rooftop solar, Newsome said, are “a core part of what a port does today — environmental responsibility.”

While agreeing the project has a long payback period, Newsome told the board “we have that warehouse there with the rooftop, and we have an opportunity to do it and that’s why we brought it to you.”

Board member Rick Stanley, a vice president with GE Power in Greenville, said he is “not a big fan of solar.”

Stanley said solar technology is changing too quickly and that panel prices are dropping too fast to make a large commitment, adding: “I’m just curious if this is the right time for this or if three years from now is the right time.”

The solar panels also degrade over time, producing less electricity as they age, and Stanley said he would want to make sure that is built into any contract.

Board member Mike Sisk, chief financial officer of Lexington-based Infrastructure Consulting and Engineering, said an unbudgeted expense for solar panels would tie up the SPA’s debt capacity as it seeks to borrow for its new container terminal and other investments.

“Is it worth trading that debt capacity” to do this project? Sisk said.

The SPA issued about $300 million in bond debt last fall to help pay for its upcoming large projects and plans to issue another $380 million in bonds by 2020. The SPA needs to earn between $40 million and $45 million this year to make the interest rate on its bonds attractive. Through the first seven months of this fiscal year, the SPA has recorded $21.4 million in earnings.

“My belief is that we’ll see a trend up through the balance of the fiscal year,” Newsome said, adding that it will be difficult to match last year’s near-record cargo volumes.

Despite the recent declines, the amount of cargo moving through the Port of Charleston so far this fiscal year is 3 percent ahead of the same period a year ago. That’s three times higher than the national port average.

Reach David Wren at 843-937-5550 or on Twitter at @David_Wren_