Yesterday, the Wall Street Journal posted this article which I recommend as a must-read for every school board and district energy manager.
To whet your appetites, the headline, subhead and first paragraph are below:
The Enlightened Classroom
School districts are using solar power to cut their energy bills—and cope with budget cuts
Solar power has long been touted for its environmental impact. But now it has a new role: saving teachers’ jobs.
“School districts across the country are turning to solar power to cut their electricity costs. With the money they’re saving, they are able to retain more teachers and programs in the face of budget cuts. As a bonus, some schools are using solar installations to teach kids about renewable energy”… full WSJ article
I try not to use this blog for promotional purposes but I will say that weve seen exactly the same results in our school district customers. While our core competency lies with larger industrial customers that have complex energy systems, we have had a lot of success helping school districts address the exact issues discussed in the article.
According to one report, school budgets in PA were cut by nearly $930M in the 2011-2012 academic year resulting in the reduction of more than 3500 teaching positions either through layoffs or unfilled vacancies. The Executive Director of the PA Association of School Administrators, one of the reports two sponsors, is quoted in the report as saying, “Districts had no choice in cutting programs that directly impact student learning.”
The good news is that for many schools there may be a choice. According to the Energy Star website, “Energy costs are the largest operating expense for school districts after salaries and benefits.” In fact, schools spend more on energy than they spend on textbooks and computers combined. By using solar and other clean, on-site generation resources, many schools can find a way to cut energy instead of educators. Heres how:
Using long-term Power Purchase Agreements (PPAs) schools can source a portion of their energy at a discount to retail rates, from clean on-site generation assets. These assets are available to schools at no capital cost from investors who recoup the cost of the assets from the sale of energy. The difference between the negotiated rate and the retail rate translates into savings for schools. Moreover, by pairing these assets with energy management equipment, schools can avoid costs related peak energy usage and even participate in demand response energy markets.
Currently, our company is operating 2.8MW of solar assets at schools in PA that are expected to save more than $3.8M in energy costs over the 20 year life of the PPA. By adding in peak management and energy market technology, additional savings of nearly $500k will be realized in the next three years alone. In a state where the average teacher salary is just under $55,000 per year that can make a difference in the number of program cuts and unfilled positions an administrator needs to deal with. The one stumbling block to this win-win solution has been the soft market for Solar Renewable Energy Certificates (SRECs) which help project financing partners recoup their investment by selling the environmental attributes generated to other energy customers. But even on this front, there is some good news with states like New Jersey and Maryland taking legislative steps to balance prices in the SREC market.
Finally, solar is not the only way to achieve improved energy economics by using on-site generation assets. I will expand on this theme in a future post.
