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Solar
installation at the Lagunitas School District, which paid zero up front
for the 58.52 kilowatt (kW DC) solar facility that will provide 65 percent
of the school's annual power needs and reduce the school's energy bill by
85 percent.
Photo
courtesy Todd Michaels
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Something New Under the Sun:
Lagunitas School District's Fast and Cheap Solar Program
by Pat Johnson
West Marin County is known for its heterogeneous population of
professionals, local business people, artists, and artisans. Set amidst
the rolling hills in the sparsely populated, mostly agricultural region an
hour north of San Francisco, the
Lagunitas School District is comprised of
four villages from the unincorporated area of the San Geronimo Valley.
Good stewardship of the planet is an integral part of the district's
philosophy. Funding, as with most California schools is not abundant. So
when it came time for the K-8 school to relocate from a building that no
longer fit the stringent seismic requirements for California schools and
to move into a brand new facility, the school district wanted to
embrace
solar energy as a way to provide a long-term hedge against rising energy
costs.
To bring down some of the initial capital cost, the district secured a
solar rebate under the 2006 California Self Generation Incentive Program (SGIP)
which was administered by the local utility, PG&E. The SGIP rebates lasted
18 months, but the district had not been able to install a solar system in
time, and the rebate was due to expire shortly.
A green-focused architect who was designing the new school gymnasium asked
local solar energy and community advocate, Peter Asmus, what could be done
to make this project happen. Asmus knew of the Mill Valley,
California-based renewable energy company,
Solar Power Partners (SPP) from its work
with the philanthropic
Marin Community Foundation (MCF), and
asked SPP to provide a means of helping the school with development,
financing and management of a solar energy facility through the use of a
Power Purchase Agreement (PPA). A PPA is a financial vehicle that
leverages investment tax credits to finance solar facilities.
Alexander Welczeck, president of SPP said, "It should never come down to
a school's having to choose between purchasing books or helping the
planet. We're glad we could set a practical example of how sustainable
energy projects can be made affordable today. SPP's investment fund
ensures we fully utilize all the available tax credits, allowing schools
to benefit from our solar energy program at no capital expense".
For solar to make economic sense, several things need to come together: a
viable state rebate program, an ability to leverage federal tax credits,
and an ability to affordably build a system optimized for maximum
production. Without a PPA, a school, which pays no taxes, cannot take
advantage of the 30 percent federal investment tax credit for renewable
energy. In other words, a school would have to pay 30 percent more for
solar energy than would a commercial entity that could easily use tax
credits and depreciation to offset the cost of a solar system.
In addition, school districts usually don't have the upfront capital to
build a solar facility, nor do all schools have the ideal building
placement to take advantage of solar energy. In Lagunitas, the new
gymnasium was oriented facing west, which was not optimal for a solar
system. SPP engaged a solar contractor who had an affinity for schools and
who happened to live in the community. He assessed the campus and its
buildings and approached SPP with the options. They determined that a
ground-mounted system facing due south would be best for harnessing the
sun.
SPP presented the options to the Lagunitas School District's board and
community, where SPP and solar integrator,
Borrego Solar Systems, presented the
economics and technical details of various scenarios. The school could
request a system to be built on the roof of the gymnasium, but it would
cost more, as not as much energy could be produced as with the western
orientation. A ground mount system was the best because it delivered the
lowest price to the school. By the second board meeting a vote carried the
motion of a solar system forward.
Lawrence Enos, superintendent of the Lagunitas district, involved from the
start as one of the main advocates for renewable energy at the school,
said, "Our district needed a renewable energy system that would
not only cost zero out-of-pocket today but would help protect the school
district against increasing electricity prices. Beyond providing a
solution that our school district could never afford on its own, we also
knew the renewable energy system would help us teach our students how
innovation, finance, government and good will can all come together for
the benefit of generations to come."
Once the system was approved, SPP had to draw up a power purchase
agreement (PPA) contract and a site lease for the system to be built on
school property. Working with the school leadership and legal counsel,
steps were put in place right down to background checks on the contractors
involved in the project. The project funding phase followed, including
review by SPP and its financial partners of the school, a third-party
legal review and a technical review by the investor to make sure
top-quality materials would be used and that the system would perform to
expectations.
The conditions were met, the construction financing line of credit was
opened and Borrego Solar Systems began building the facility. Every school
poses unique construction considerations. The most important is to find
roofs that are in good condition for roof-mounted systems or land that
will not be occupied over the up to 30-plus years of the life of the
facility. Rating and condition of the electrical systems are examined and
reviewed. Architectural and engineering drawings, site plans, and roof
layouts of the school can cut hours off designing a system for a school
The school solar installations provide an added value with free and
engaging curriculum for students of all ages. Non-profit groups such as
The NEED Project provide K-12 National Science Standard materials that
prepare and educate students about the renewable energy careers of the
future.
Once the project was 95 percent complete, SPP worked with the local
utility to connect it to the grid. A long list of criteria were reviewed,
including final performance and monitoring tests that would enable remote
observation of the system conditions. Today, the solar facility at the
Lagunitas School District provides an estimated 65 percent of the school's
annual power needs and will reduce the energy bill by 85 percent.
The 58.52 kilowatt (kW DC) system will generate 86,000 kilowatt hours
(kWh) in its first year of production. The annual carbon dioxide offset of
about 70 metric tons, achieved through the use of the solar power system,
is equivalent to the carbon dioxide emissions from 7,600 gallons of
gasoline consumed, according to carbon statistics
calculated via the US Environment Protection Agency.
The tax credit system is essential for the economics of these projects to
work, and the Power Purchase Agreement is the dominant driver for making
solar projects a reality. Sixty percent of the photovoltaic system's
kilowatts deployed in 2007, and an estimated 70 percent in 2008, were made
possible through the PPA leveraging of federal tax credits, providing a
good partnership between the public and private sectors and enabling
investors to participate directly in renewable energy projects.
Many state programs have been developed with federal tax credits in mind,
and therefore without these credits the economics are challenging. That
means the public must put pressure on government to reverse the December
31 2008 planned reduction of the 30 percent federal tax credit to 10
percent, making photovoltaic solutions far less attractive. It is hoped
that the new administration in the White House will continue the growth of
clean energy solutions by renewing the 30 percent federal tax credit plan.
By embracing solar energy, school districts are not just helping
themselves; they are helping an aging utility power infrastructure to
survive by removing some or all of their demand that the solar system now
generates onsite. Schools present an ideal setting for solar, as schools
typically produce more than they use during peak times of the day when
energy is most expensive for both the user and utility.
Educating school districts and the public is vital for solar to succeed in
schools. The adoption rate of solar installations in schools is still very
low, but the enthusiasm is great. This is driven by a myriad of false
public perceptions around the cost to build these systems, cash payback
periods without the tax credits, true maintenance requirements, technology
obsolescence, and actual availability and cost of public bonds. Offerings
like power purchase agreements remove the upfront completion hurdles and
most of the unknowns around future cost/benefit.
The economics of solar systems in schools, particularly those that can be
built in California with rebates and Power Purchase Agreements with proven
providers, can be cash positive from day one.
Pat Johnson is a writer exploring various successes in the renewable
energy marketplace.
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