GUSTINE - A Colorado company is studying the feasibility of developing a solar energy operation on 160 acres of city-owned property at the municipal wastewater treatment plant.

The city has signed off on a three-year lease agreement for the property with SolisGen LLC, a firm which is considering several Central Valley locations for solar operations.

If it comes to fruition, the solar operation will generate electricity for sale to PG&E and new revenues to the city, which in the past has leased the marginal land for farming operations.

One of the city’s three options for compensation if SolisGen launches a solar operation on the site is a $1,000 per acre annual lease on a long-term basis. In the short-term, the lease will bring the city $10,000 a year.

“It is a good opportunity for the city to get some additional funding,” City Manager Margaret Silveira said recently. “The solar has a lot of potential. We would never get anywhere near $1,000 an acre for that property otherwise. That is far more than we could realize with any other type of project.”

But the solar project is anything but a done deal.

Carmine Iadarola, a principal in SolisGen, said the firm is optimistic about the Gustine site, but must overcome obstacles which include a review of environmental impacts and negotiating an inter-connect agreement to connect into the existing power grid.

“My guess is that there will be some environmental issues, but we don’t know exactly what those will involve. I would anticipate that there will be some mitigation required,” he told Mattos Newspapers. “It is also next to a duck club. We have to make sure that we do not impact that area and the use of the land, and I don’t think that we will.”

But the biggest obstacle, Iadarola commented, may be installing the transmission facilities needed to carry the power from the remote solar farm to the nearest PG&E substation. “We will install an underground power line from the site to the sub-station on the west side of Gustine,” he explained.

Iadarola said his company is working with Gustine’s efforts to become a “green” city, and hopes that the local effort becomes SolisGen’s flagship project.

Iadarola said he and two partners have more than 70 years of collective experience in the energy business - including experience in wind generation. The Central Valley enterprise marks their first venture into solar, and is made possible by federal stimulus funds supporting alternative energy.

“If you’re shovel ready by the end of 2010, (the federal government) will give you 30 percent of the money back,” he explained. “That makes it very attractive for institutions to lend money for green energy.”

Iadarola said the firm is looking at about a dozen potential sites in the San Joaquin Valley.

The project would use non-reflective, black panels, Silveira said.

Council member Lynn Schultz said he is optimistic about the potential of the project.

“I’m glad to see that they are interested in coming to Gustine. I hope it works out, although I’m concerned about the environmental aspects of it,” he commented. “I’m really enthused about solar. I think it is the wave of the future, and I’d rather see solar panels around than those big windmills.”