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There is an SOS coming from communities across the nation: Save Our Schools. With the rise of new financing tools like power purchase agreements (PPAs)and the right support from the public and politicians, we believe we have an answer: Schools On Solar.

Schools nationwide are in dire fiscal straits and have been forced to make hard financial decisions to stay afloat — usually by shutting down an increasingly comprehensive list of classes, skimping on materials and shutting down operations.

We believe that solar power options like PPAs can recharge our ailing schools and not only save them money, but also help plan regular, measured payments that put resources and financial support back into schools’ hands.

Traditionally, implementing solar systems at educational facilities presents a laundry list of problems: many public schools don’t have the available resources to make use of capital budgets, can’t gain the support for bond measures including solar systems or can’t run a buying process on existing staffing and budgets in order to purchase and maintain a solar installation. RFP management, architectural design and proper evaluation of alternative energy paths are time-consuming and expensive, making it difficult to go solar. The costs and efforts of system maintenance and monitoring — combined with uncertainty around system generation — further complicate the process.

These contributing factors all cause administrators and facility managers to be initially cautious and slow to move on investments like solar energy.

But we have found that these same administrators are financially creative people who understand the financial benefits of solar. And they want to see progress. Their bottom line is often that solar companies have to deliver more than an environmentally-friendly project. They have to be financially sound and save the district money from day one.

Enter PPAs

PPAs can help schools precisely predict what their power costs can be — through fixed cost energy pricing — so they can better gage spending that might otherwise go to increased electricity costs.

Under the proper utility tariff and utilizing the available tax and rebate incentives, PPA providers can offer schools a rate of power that’s competitive with existing utility rates. Meanwhile, PPA providers handle the outsourcing of contractors and financing, removing extra labor on their behalf.

New options like PPAs make for a strong start.

For more infromation contact:

Mike Brown, Eco Depot USA
mbrown@ecodepotusa.com

www.ecodepotusa.com

DENVER

By CATHERINE TSAI

The Upper Scioto Valley School District in Ohio, battered by a slowdown at a nearby Ford Motor Co. plant, wanted to explore alternative energy when it developed a plan to fix its budget and create jobs.

It had a square mile of land where it could put wind turbines and tap some of the best wind resources in the state. It just needed the money.

That’s where Boulder, Colo.-based NexGen Energy Partners came in.

NexGen builds and maintains onsite wind and solar systems for customers, sparing them construction and maintenance costs. Using renewable energy grants and credits to defray its costs, it makes money selling power to customers over long-term contracts.

NexGen erected two 100-kilowatt turbines for Upper Scioto Valley schools, which paid $35,000 in upfront costs for some of the power and an engineering fee, Assistant Superintendent Jim Bowser said. The district projects the turbines will save it about $1.7 million over 15 years on utility bills.

“Are we breaking even? You bet. And we’re making money,” Bowser said.

The district is looking at adding more turbines, a solar power system, and possibly turning biomass into energy with other corporate partners.

Having someone else build a renewable energy system and buying just the power is becoming more common for nonprofits, businesses and local governments and agencies looking to switch to wind or solar. The model makes the most sense when customers own the properties where equipment is installed, where they pay high utility rates for conventional power, and when projects can qualify for incentives or tax credits.

Schools and other government entities don’t qualify for tax credits, but 14 states allow third parties that aren’t a regulated utility to sell power, according to the Database of State Incentives for Renewable Energy, or DSIRE. Those third parties often qualify.

“It’s the only way government incentives can effectively be used,” said MP2 Capital CEO Mark Lerdal. The San Francisco-based solar project developer has a power purchase agreement with the city-owned Denver International Airport, where it owns and operates a new solar power system.

There are other options for minimizing upfront costs. Eighteen states allow loan programs where homeowners or businesses pay off the costs of a solar project over time through a special assessment on property, according to DSIRE.

“It’s really interesting to see how much innovation is happening in the clean energy space in terms of financing,” said Karlynn Cory, the renewable energy finance team lead at the National Renewable Energy Laboratory in Golden, Colo. “It’s helping to accelerate the pace of development.”

The key for NexGen is finding projects where it can build on site, with no need for complex transmission systems to deliver power.

“If we can deliver energy on site, whether it’s a school, college or small town, all that infrastructure is already in place. We just have to bring in the actual equipment. We don’t have to build tens of millions of lines,” said NexGen President John Brown, formerly of NREL.

The private company, founded in 2007, doesn’t reveal its finances but said it was profitable last year and is on track to make a profit this year. It has about two dozen customers in Ohio, California, Kansas and Hawaii, said Ted Rose, vice president of business development and public affairs.

Partners invested $20 million in NexGen last year and could invest about $30 million this year, Brown said.

For years, Eldorado Artesian Springs Inc. in Louisville, Colo., wanted to add renewable energy, but paying about $400,000 to install its own solar panels was never an option, Chief Financial Officer Cathy Shoenfeld said.

NexGen has provided Eldorado with solar panels that should generate close to half of the bottled water company’s electricity needs. Under a multiyear contract, NexGen will sell the power to the company at rates comparable to what the utility Xcel Energy charges. (Xcel also generates some of its power from renewable sources.)

“It’s not going to cost us any more than what we would pay for power from Xcel,” Shoenfeld said. “In a situation like this, there’s really not a lot of risk.”

Links:

http://www.businessweek.com/ap/financialnews/D9FFE24O1.htm