Oceanside is expected to save millions of dollars in energy bills and get nearly 200 shaded parking spots under a recently approved project to install solar panels at five city facilities, including the city’s police headquarters and a fire station, official said.

The city signed a power purchase agreement earlier this month with PFMG Solar LLC, a Huntington Beach-based firm that will install and maintain the solar panels in exchange for the city buying the energy they produce.

The cost of that energy will be significantly lower than what Oceanside now pays San Diego Gas & Electric, saving the city an estimated $8 million over the live of the 25-year contract, officials said.

“We’re not getting it all up front but it will be over the term of the agreement and that is a very large number,” said John McKelvey, a management analyst with the city’s utilities department who is overseeing the project.

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The panels will be installed — at no cost to the city — at Oceanside’s police headquarters, Fire Station 7, the city operations center, Melba Bishop Recreation Center and El Corazon Senior Center.

The agreement with PFMG Solar guarantees the city a fixed rate of 16 cents per kilowatt hour produced by the system for the next 25 years. The city pays SDG&E an average rate of about 23 cents per kilowatt hour, officials said.

The company has similar agreements with government agencies throughout Southern California, including the cities of Palmdale and Lancaster and school districts in Palmdale, Redondo Beach, and Pomona.

Because the price is locked at the 16 cent rate, Oceanside’s savings will be greater in the future, when SDG&E rates increase.

“What (the agreement) is going to do is provide us with an insurance policy because we know what we’re paying when the energy starts flowing and for 25 years,” McKelvey said. “Basically, we have price assurance.”

The $8 million savings estimate was reached by comparing the $13 million it will cost to power those facilities during the life of the contract, with the estimated $21 million Oceanside would have paid SDG&E without the solar panels. That estimate assumed an annual rate increase of about 5 percent.

At the police headquarters, the panels will be installed on the roof of the building. The four other city facilities will get covered parking structures similar to the ones used in retail store parking lots such Walmart.

Overall, the panels will cover about 36,000 square feet of space, or roughly enough to cover about 175 parking spots.

“So, we’re going to get the benefit of lower electricity costs and we get the benefit of covered parking,” McKelvey said.

If the city were to pay to have those spaces covered, it would cost roughly $1.8 million, McKelvey said.

The solar panels will generate roughly 1.3 million kilowatt hours of energy a year. For comparison, the city uses about 20 million kilowatt hours of electricity a year purchased from SDG&E at an annual cost of about $3.5 million.

“We’ve been wanting to see solar on our buildings and I was hoping to have it in this building we’re in now (City Hall),” Councilwoman Esther Sanchez said. “But saving $8 million over a 25-year period is big. It’s a huge number.”

McKelvey said there were a lot of factors that went into choosing each location, including how much sunshine each building gets a year. Priority was given to facilities where covered parking spaces would be easiest to build.

Because of its proximity to the coast, City Hall gets less sunshine than facilities in the eastern part of the city. City Hall also has a multilevel parking structure making it difficult to install covered parking.

“We wanted to get the low hanging fruit,” McKelvey said. “The facilities that we could get up and running relatively quickly and achieve some significant savings.”

The city has not ruled out installing more solar panels in the future, McKelvey said.

Installation is expected to begin by the end of the year and is expected to take about nine months to complete, officials said.