A nearly 5-year-old proposal to put solar panels on top of Bend’s downtown parking garage may yet see the light of day.

The project has faced financial challenges that have nearly kept it from happening, including the dissolution of a public-private partnership to help pay for installation, the disappearance of green energy tax credits and the possibility of losing its $400,000 in Pacific Power grant funding.

But just as the city was preparing to put its solar designs on the shelf and give back much of the grant money, officials were able to strike a deal this month that will greatly alter the size of the project while giving Bend complete ownership of the technology.

“We’ve always felt it was a good demonstration project,” Bend Downtown Manager Jeff Datwyler said. “It’s something really visible for downtown Bend and something unique to complete the parking structure that will build in energy cost savings for the facility as well as provide some direction for the city in pursuing alternative and renewable energy sources.”

The plan is to build a 33-kilowatt solar array above the parking area on the garage, which is located on the corner of Minnesota Avenue and Lava Road. The array will not eliminate any parking spaces and should be able to produce about 57,000 kilowatt hours of electricity per year, which is enough to power four homes.

Based on the current rates the city pays for electricity at its parking garage — just over $0.06 per kilowatt hour not including certain charges — it would cost about $3,600 for 57,000 kilowatt hours.

Datwyler said the energy savings will go toward offsetting the power costs of the parking garage, which was built using a property tax levy that will expire later this year. It’s estimated that over the 35-year lifespan of the solar panels, the city could save around $160,000.

A $400,000 grant through Pacific Power’s Blue Sky renewable energy program will help pay for the design and construction. A $45,000 grant from the Energy Trust of Oregon will go toward getting the project up and running.

Datwyler said the city will pay only for operating and maintaining the system, which he estimated to cost around $500 a year.

The initial plans were to build a 200-kilowatt system that would have provided the structure with about 50 percent of the energy it needs.

In fact, the city had spent $107,000 of the Pacific Power grant for such a system, and had entered into an agreement with a private partner, SunEnergy Power Corp., in 2006 to install the panels.

But when the financing stalled SunEnergy Power’s plans, the city in 2010 turned to another company based out of Eugene, Advanced Energy Systems, to move ahead with the proposal.

That company was expected to use green energy tax credits to help pay for the cost of construction, though that plan failed when those incentives were not awarded.

“We’ve had several obstacles over the years,” Datwyler said. “All of these things had to happen in concert and at the same time, and that’s what the difficulty has been.”

After four years of problems and delays, Pacific Power decided earlier this year to abandon the project and ask the city for the remainder of its grant funds back. City Manager Eric King even told Bend city councilors during a public meeting that the panels were not going up.

Earlier this month, however, that decision was reversed, and Pacific Power decided to give the city another chance.

“There was nothing really wrong with the plans,” Pacific Power spokesman Tom Gauntt said. “So, in some way, the investment has already been made.”

There are some deadlines the city must meet, he said. Those include completing a detailed construction plan by July 1, and having the facility online and producing electricity by Sept. 1.

If those deadlines are not met, says Gauntt, whatever grant funds have not been spent will go back into the Blue Sky program fund.