The State Energy Conservation Office announced Friday that Lampasas has been awarded a $2 million grant to construct a 309- kilowatt solar energy facility.

The $400,000 of city matching funds required, however, as well as projected maintenance costs associated with running the energy facility, nearly caused the Lampasas City Council to reject the project.

The solar site, to be located at a former city landfill off Old Georgetown Road, will use photovoltaic panels to generate at least 433,000 kilowatt-hours of electricity per year — about 0.5 percent of the city’s annual consumption, according to SECO.

The solar facility will displace 260 metric tons per year of carbon dioxide greenhouse gas emissions — about the amount emitted annually by 57 passenger vehicles or 43 typical United States homes — that would have been created by conventional energy production processes, according to SECO.

The system eventually could produce as much as 4 percent of the electricity the city consumes, City Manager Michael Stoldt said at a recent City Council meeting.

“I am just beside myself right now,” Mayor Judy Hetherly said Friday, shortly after the grant announcement. “It’s the future. A city our size could never have gotten into this without this kind of help.”

A few days before the grant award was announced, the City Council barely approved funding for the solar project.

After several minutes of debate, the council voted 4-3 to use $400,000 of electric fund reserves to meet the city match required for the SECO grant. The new fiscalyear budget also includes funding for one additional Electric Department staff position, which will be filled beginning in April.

Ms. Hetherly and council members John Cole, Les Gerhardt and TJ Monroe voted to approve the budget and solar project. Councilmen Jerry Grayson, Brad Neely and Evan Stubbs cast ‘no’ votes.

Before voting against the project, Neely noted the city will incur periodic costs for replacement materials. Solar panels’ efficiency may decrease at a rate of about 0.5 percent per year, HDR Inc. engineer Jim Glaser wrote in an Aug. 19 email to city officials, and Glaser said replacement of inverters will cost about $150,000 every 10 years.

The solar energy market holds interesting possibilities, Grayson added, but he said he doesn’t know if Lampasas will benefit immediately from paying to build a solar power facility.

“It’s a nice little project to play with and have ...,” he said, “but don’t know how much we’d save on electricity, and I don’t know how much it would be.”

In the span of just a year or two, Cole said, Lampasas may not save enough on power purchases to recoup its initial expenses for a solar site. The councilman agreed with Stoldt, however, that solar energy costs likely will decrease over time and that a solar facility will give Lampasas long-term benefits.

“In 10 years I think he’s right,” Cole said of trends toward more solar power use. “It’s growing other places, and it’s being subsidized to some extent in other places.”

Although Stoldt said it costs more to generate electricity from solar panels than from conventional sources, utility rate adjustments in the upcoming year are projected to yield a net decrease in most customers’ electric bills.

Ms. Hetherly also said in the long term the solar facility will help Lampasas and the environment.

“We’ll benefit from the way, way into the future,” she said. “I’m so proud of our staff and council for deciding to go forward with this.”