NEWBURYPORT — Installing solar panels on top of the middle school and public works building will generate at least $649,141 in savings to the city — using "conservative" figures, Mayor John Moak told his Energy Advisory Committee last night.

The $3.6 million solar panel project will be financed and maintained by Colorado-based EyeOn Energy. Moak has signed a 20-year contract with the company that will pay for and install a 512-kilowatt solar panel array atop the middle school and Department of Public Services building that would offset about 34 percent of the school's current electric usage.

In exchange, the city will agree to purchase back energy created from the panels from EyeOn at a cost of 14 cents per kilowatt, escalating 4 percent per year for the next 20 years, until it can purchase the system back and reap the 34 percent cost savings themselves.

Addressing his Energy Advisory Committee, Moak said the city's agreement with EyeOn allows for the city to keep some of the governmental rebate for the project — a facet of the project that he called "unique."

Through the agreement, EyeOn will see a $1.2 million rebate for the installation and the remainder — $400,000 — will come to the city to be put into a stabilization fund that will go toward buying the panels back in 12 years, Moak said, meaning at the end of 12 years, the city would only have to pay about $240,000 of the $890,000 to buy the system.

The mayor told the committee city officials used "conservative" figures in determining the amount of savings in electricity that the city could see from the solar panels; it could reach over $1 million, he said.

Referencing a proposal from North Andover-based Nexamp Inc., Moak said the city's study of the proposal, using the same data, showed much less savings — about $106,000.

Once the contract was finalized, Moak told the committee, the contractor started initial work, including applying for the needed electrical permits and filling out the needed paperwork to be on school property.

In recent weeks, critics of the deal have questioned whether the mayor has done due diligence in reaching the deal, particularly after Jeffrey Wootan, a member of the committee whom Moak had enlisted to negotiate the EyeOn deal, filed a conflict-of-issue disclosure. In the disclosure, Wootan admitted he has been "in talks" to join Integrated Energies, a company that an EyeOn executive said will do subcontracting work on the solar panels.

Giving the group a review of the history of the project, Moak apologized for poor communication with the committee about the project that has been in the works for more than a year.

"Probably communication wasn't as good as it should have been," Moak said, adding that he looks forward to working with the committee on future energy projects.

Pieces of the solar panel project began to move forward this summer, he said, prompting the city to need to act quickly and apply for a waiver to circumvent the state's mandated bidding process. City officials had concerns about the availability of solar panels and funding by the Mass. Technology Collaborative if the project was delayed and wanted to stay at the forefront, Moak said.

Questioned if any risk analysis was done on the solar panels — for areas such as damage, performance or lifespan, Moak said the panels will be owned by EyeOn, which will be responsible for maintaining them. Any risk will likely happen in the first five years or so, Moak said.

Other members questioned why the city isn't pursuing a smaller system where the rebate is larger, and why Triton, which is pursuing a similar project, has yet to sign a deal.

A regional school, Triton's School Committee wants to stay appraised of the details, while Newburyport's School Committee has voted, allowing Moak to oversee the contract, committee member David Hall said. "That's just taking a little bit longer," he said.

The Mass. Technology Collaborative is helping to finance the project. The city hopes to have the system commissioned by the end of the year.

The city will need to fund repairs to the roof of the Department of Public Services building before the panels are installed. The solar panels will not penetrate the roof, Moak said, but have a foam base.

"There are a lot of things that are good about this," the mayor said.