Solar energy is more expensive, city administrator tells council

A proposed city-owned solar field would increase electricity costs for North Platte residents by roughly 5–6% compared to remaining with the Nebraska Public Power District (NPPD), City Administrator Layne Groseth told the city council Tuesday.

Groseth and North Platte Utility Manager Tony Miller told the council they each conducted independent calculations using data from NPPD, industry presentations, and cost estimates from Premier Energy.

They each reached the same conclusion — the solar project would add a significant premium to customer electric rates over time.

“We independently crunched the numbers, and it was almost scary how close we came to the same analysis,” Groseth said. “It would take a pretty big swing before we reached a break-even point.”

In the recent fiscal year, North Platte spent a little over $18.3 million to purchase electrical power from NPPD. In comparison, electric revenues totaled $31.7 million. That means about 57.6% of revenue goes directly toward purchasing wholesale power, with the rest covering operations, transformers, and system maintenance.

Groseth said current NPPD power costs average about 4.7 cents per kilowatt-hour. In contrast, the estimated cost of solar, factoring in installation, bonding, insurance, and long-term maintenance, would be closer to 7.8 cents per KWh.

Under the current contract, the city may obtain up to 10% of its power from sources other than NPPD. Under a scenario where 90% of power remained with NPPD and 10% came from solar, the city would spend approximately $1.2 million more per year, even before future NPPD rate escalations.

“There would be some increases either way (with or without solar,)” Groseth said, “but we believe it would be a bigger increase if solar was in the mix.”

Using NPPD’s projections and adding a 1% annual escalator to the solar cost estimate, he and Miller modeled rates through 2041. The analysis showed a consistent premium of 5–6% on customer bills if the city adopted a 10% solar mix.

Officials also noted that NPPD’s pricing is historically stable, often remaining flat for four-years at a time.

Several council members expressed discomfort with the financial risks, construction uncertainties, and federal tax-credit deadlines associated with developing solar.

Groseth said the expiration of federal incentives is primarily driving the project’s timeline. “If we had six months to a year to really dig into the numbers, I might feel better, but the deadlines put a crimp in that,” he said.

Councilman Ty Lucas added that national trends raise red flags. Roughly a third of large solar projects face delays or cost overruns due to shortages of components and high demand driven by federal tax credits.

Councilman Ed Rieker questioned whether the city should use its bonding capacity for a solar farm rather than for long-term infrastructure.

“I’d much rather spend that bonding ability on streets and development than on a solar program,” he said. “None of it makes fiduciary sense to me.”

Others worried about aesthetics, decommissioning costs, insurance requirements, and long-term management responsibilities.

Council members who attended a recent NPPD outreach event said the district acknowledged solar diversity as an option but noted that it remains more expensive.

“I asked them, ‘If it’s such a great idea, why don’t you install a solar farm here?’” Lucas said. “They told us unless customers are willing to pay the premium, it doesn’t make economic sense for them.”

Lucas added that even large tech companies, historically champions of green power, are beginning to shift to conventional sources of energy, as demand outpaces the supply of renewable energy.

“The landscape is changing,” he said. “These companies are starting to go where the power is available, the workforce is available, and housing is available; not necessarily where the green component is strongest.”

While most council members agreed that solar technology will continue to improve, they also agreed that the numbers don’t justify a city-owned project right now.

“The math just doesn’t quite make sense,” Councilman Pete Volz said. “I don’t want to tie future councils down with something that might not come to fruition.”

This item was simply a discussion point on the agenda, so no action was taken.

The discussion came from a presentation in early October from Premier Energy, a renewable energy developer based in Grand Island, which pitched a five-megawatt solar project to the council.

© 2025 The North Platte Bulletin. All rights reserved!