In today’s budget climate, cities and towns across the Common Wealth/New England are highly motivated to explore a variety of options to reduce their operating costs. Solar energy has caught their attention as a compelling solution to lower their energy expenditures. Increasingly towns and cities are taking a comprehensive approach to solar, and are strategically evaluating their portfolio of publicly-owned buildings, land, and parking lots to meet their financial and renewable energy goals.
Municipal
Here at Solect Energy we are seeing an expansion in the variety, and number of options municipalities are pursuing for solar projects:
A town’s Department of Public Works (DPW), which often owns warehouse-style buildings, offer ideal real estate for roof-top solar. Towns like Lunenburg, Medford, and Sherborn are among those who have DPW solar installations.
Public Housing Authorities (PHA) facilities are also excellent candidates for solar. Complexes in the towns of Fairhaven, Worcester and Blackstone have installed solar, substantially lowering their energy costs.
Town and city halls, police and fire stations are also attractive options for solar installations. With the recent extreme weather events impacting our communities, there is an increased interest in combining solar with storage technology to extend resiliency and ensure emergency response of critical infrastructure. Haverhill City Hall boasts solar panels, as does a town hall annex in Coventry, RI.
Community solar farms, whether installed on municipal land or on private property, are another way a public entity can take advantage of solar. For example, the Town of Hopkinton purchases energy from a community solar farm located in Holliston. This is an example of a municipality acting as an “off taker” of power from other sites. Another example of an off-taker model is privately-owned Middlesex Green. Its solar array provides electricity to Concord Municipal Light Plant to help the town meet its renewable energy objectives.
Solar and energy storage systems are a great way to build resilience and provide emergency backup power for first responders and other emergency services. Energy storage is also a valuable tool to help reduce “demand charges” which are based on a customer’s peak energy usage. Demand charges are typically 30%-70% of a customer’s bill and an energy storage system can really help bring those costs down.
Schools
And finally, schools. They have traditionally been municipalities’ first choice for solar projects, as schools are always under budget pressures and their installations offer unique benefits. Somerset-Berkley High School and Fitchburg Public Schools have substantial rooftop installations, while Upper Cape Cod Technical High School boasts a large solar canopy in their parking lot.
The Solar Foundation’s recent report “A Brighter Future – A Report on Solar in Schools,” highlights the impressive growth of solar installations at K-12 schools across the country. The number of U.S. schools with installed solar jumped 47% from 3,741 in 2014, to just shy of 5,500 as of Nov. 2017. The state of Massachusetts has an excellent track record, ranking #5 of all states in the number of schools with solar panels installed, and #4 for the amount of capacity per student (kW).
Additional benefits of solar on schools include:
- Predictable energy costs. Schools can hedge their bets against rising utility rates, and improve the ability to accurately forecast and budget. This can help to avoid surprise budget impacts and teacher layoffs or cutting of other curricular programming.
- Environmental and health benefits from a clean energy source reduce greenhouse gas and other pollutant emissions. According to the report, “solar schools offset an estimated 1 million metric tons of carbon dioxide annually, equivalent to the greenhouse gas emissions from nearly 221,000 cars.”
- A highly relevant teaching tool for STEM (Science Technology, Engineering and Math) Programs. Many schools integrate their system into their teaching curriculums. Some have kiosks that allow students to proactively monitor the solar array and make real world equivalency comparisons on energy saved.
Financing for Solar
Lucky for municipalities in Massachusetts, the solar financing options are well-established and have proven to be highly successful. The most popular, and the one with the lowest up-front capital costs, is a third-party ownership contract, known as a Power Purchase Agreement (PPA).
Since municipalities and their entities, such as schools, operate as non-profits, they cannot directly take advantage of federal solar tax incentives. However PPAs allow towns to still reap advantages from these benefits. Solar energy companies finance, build, own, and maintain a system on the municipal-owned site, selling the solar electricity generated back to the town at a reduced, fixed rate for an extended period of time (typically 15 to 20 years). Under this model, the municipality incurs no (or very low) upfront costs and saves money through reduced energy bills. The PPA also provides a predictable budget line for town expenses, helping towns to avoid sudden budget challenges due to energy price spikes. According to the Solar Foundation, PPAs have become the most popular option for financing of school projects across the country. They estimate that approximately 90% of all installed school solar systems over the last three years are utilizing PPAs.
Despite the popularity of PPAs, there are a myriad of other financing options available for a solar project, depending on the opportunity – a customized solution can be developed for just about any situation. Given all the solar installations and the financing options available to municipalities, how best to proceed? The first step is engage a solar energy expert to assess your specific situation and identify the best path forward.
At Solect Energy we partner closely with municipalities to offer them the insights and expertise of an established solar company with more than 400 installed projects. Together with our PPA partner, PowerOptions, we are saving schools, non-profits and municipalities more than $20 million over the course of their 20-year lease agreements. Give us a call to learn how your town or city can start benefiting from solar.
