Solar Compass

Cumberland School: From Visualization to Realization in a Matter of Weeks

Yoel Hanegbi led his team with installing "peel & stick" adhesive photovoltaic panels on the roof of Cumberland Elementary in Sunnyvale, California.

Eshone Energy, working as the PV installer with Bruns Belmont Construction, Inc. , broke ground in August and the 14.7 kW roof-mounted solar system was up and officially running by September 1st.  This was a small solar project that nevertheless, generated a lot of excitement for the students and the surrounding community; so much so that a similar Solar Project was initiated for Lakewood Elementary PV System, also in Sunnyvale.

Here are a few shots of our recently installed Solar Power System on the roof of Cumberland Elementary School.

Some details about this Solar project:

• 14.7 kW Photovoltaic (PV) system
• Eliminates 25,000 lbs of CO2 annually
• Energy Output:  23,000 kWh
• 108 Adhesive Unisolar panels of the Amorphous type
• 3 inverters from SMA
• Angle of the panels: 20 degrees
• Project was completed in 4 weeks

Students especially enjoy going online to check the energy data in real time through the Fat Spaniel Monitoring System.

SOLAR POWER NOW for Schools Going Solar. That's being  SMART SOLAR TOGETHER.

Check out this 3-minute video on the process, progress and completion of the project (video coming soon!)

The Federal Government Provides Relief for School Districts through CREB and QSCB Bonds

Yoel Hanegbi, CEO of Eshone Energy, shares exciting news regarding the latest methods for School Districts to obtain funding for Solar Projects.

Many school districts are eager to Go Green and installing solar panels on their schools holds great interest for them.  But in these tough economic times, many hesitate to pursue it further because they simply don’t have the financing available to get the project started.  There are many incentives and rebates available, and some fortunate school districts find they can tap into State Modernization Grants to close the gap and fully fund the Solar Power System.  Others put up a bond for voter approval specifically targeted for Solar Photovoltaic (PV) systems and other Renewable Energy applications.  And still others are opting to go with Power Purchase Agreements (PPAs), though many would prefer to own the system on top of Going Green.

However, with Bonds, school districts generally end up paying back two and three times the face amount of bond dollars received.  For any investment, interest rates are used to describe the cost of capital. For PV solar projects, the initial investment costs are the biggest cost factor so that the interest rate plays an important role in the overall costs of the project.  

But if you act fast, you can get 0% or near 0% bonds the Federal Government is offering through the American Recovery and Reinvestment Act (ARRA).

These two bonds, Clean Renewable Energy Bonds (CREBs) and Qualified School Construction Bonds  (QSCBs), allow school districts to pay off the bonds from the dollars they would have paid for their electricity consumption.  Dollars that had previously been earmarked for the utility company is now designated for bond repayment and after 15 years, it’s paid off and then all that money can now be funneled back into the general fund!

• Clean Renewable Energy Bonds (CREBs) are a means to lower the cost of capital for renewable energy projects.  They can provide public entities with interest free – or near 0% interest - capital.   Public entities can apply for those funds at the IRS for allocations.  Once the public entity has received an allocation, a CREB can be issued to finance a PV Solar project.  The ARRA has increased the allocation to provide $2.4 billion to finance qualified renewable energy facilities but have a deadline of 8-4-09 for 2009 so unless you’re already in the process of filling out the application (starting on page 21), it’s too late to file this year but now’s a good time to become familiar with the requirements for next year’s filing deadline.

•  Qualified School Construction Bonds  (QSCBs) applications have a deadline of 8-25-09 so it’s still possible to get your application in on time.   While CREBs are limited to $3 million per Renewable Energy Project, QSCBs have a $25 million cap.  The bonds provide federal tax credits for bondholders in lieu of interest in order to drastically reduce the cost of borrowing.  The ARRA provides for an allocation to each state, along with separate allocations for large school districts. The 2009 national bond volume cap for QSCBs is $11 billion with $773,525,000 allocated to California in 2009 and the same amount is expected for 2010.   More allocations totaling $581,966,0o0 in calendar year 2009 were made directly to California's eleven largest urban districts which may choose to re-allocate any unused balance to the State of California.  Here’s a link to download the application.

With upfront costs being a major factor in the decision process, these two methods can significantly reduce that cost, making the decision to Go Green a responsible and affordable choice.  Not to mention that you’ll be doing your part to stimulate the economy by creating jobs, which is the main thrust of the ARRA in the first place.

Why SRECs Are Important To Schools

Eshone Energy delves into the benefits of schools owning their Solar Power System and keeping their SRECs as a source of ongoing revenue.

“One of the cornerstones of President Barack Obama's energy plan is developing more domestic renewable energy like wind, solar and geothermal,” writes Arthur O'Donnell,  Executive Director of the Center for Resource Solutions in an article for the Mercury News.  “Renewable energy holds the answer to not only eliminating the 40% of our overall greenhouse gases, but creating a clean source of energy for the coming revolution in electric vehicles. With its immense opportunities in innovation and job creation, it's a rare bright spot in an otherwise dark economy.”

One of the recent ways to get involved in clean energy is to buy Solar Renewable Energy Certificates (SRECs).  These are tradable certificates that represent all the clean energy benefits of electricity generated from a solar power system. Each time a solar electric system generates one megawatt hour (MWh) of electricity, an SREC is issued, which can then be sold or traded separately from the power. This makes it easy for individuals and businesses to finance and invest in clean solar power. 

Renewable Energy Credits (RECs) were developed to help meet compliance goals for renewable portfolio standards (RPS) or for voluntary renewable energy purchases.  RPS policies differ greatly from state to state with 26 states and the District of Columbia already adopting RPS policies.  California’s will be aggressive with goals of 10% by 2010 and 33% by 2025 if the current bill is passed.  

SRECs are a win-win situation for both the buyer and the seller.  When someone buys an SREC, even if they don’t own their own solar power system, they can still benefit from the environmental benefits of that renewable-energy generation. For the seller (the system owner), SRECs provide another revenue source, which can significantly offset the system costs.  The retail price of a REC ranges from 1c/KWh to 2.5c/KWh for residential and small commercial customers.

Utility companies will be big buyers of SRECs since states have specified percentage targets for the amount of renewable energy a utility company must provide for their consumers.  SRECs are a major means to help utility companies meet these RPS compliance goals.  SRECs are normally traded between parties through purchase and sale agreements that are negotiated between the buyer and the seller. Aggregators and brokers also actively participate in the SREC market.  For a detailed report on how SRECs work in detail, please read, “A Comprehensive Guide for Managing Complex Solar REC Activities”, by attorneys Tauna Szymanski, Scott Stone, and Carter Chandler Clements.

Schools will benefit from owning – and selling – their SRECs more than with most other types of RECs (wind, landfill gas, biomass, etc.).  Why?  Because utilities will get penalized if they don’t meet their Solar percentage targets. They could opt for an alternative compliance payment (ACP) but the cost is much higher for the Solar ACP than for a standard ACP (i.e., New Jersey’s current Solar ACP is $711, while the standard ACP is $50 per REC.)  This makes SRECs that much more attractive in the market (buyers would not buy SRECs to satisfy their compliance obligations if they could pay less for the ACP).  

SREC’s can provide a significant revenue stream.  For example, 3 Phases Energy Services report that SRECs can contribute 42% to the Net Present Value (NPV) of a solar project in Colorado.  Even though this same report shows California (currently not trading RECs for compliance) is at 2%, this is poised to change shortly and significantly.

Global Warming has become a real and present threat to the world’s environmental balance.  Change is coming, borne out of necessity. President Barack Obama's energy plan is evidence of the Nation’s call to action and setting RPS standards to regulate compliance is one result of that call. Because of that, even though schools operate on tight budgets, monetary incentives specifically set aside for schools to implement Renewable Energy Sources is more readily available than other types of funds.  And by installing Solar Power Systems, the opportunity is there to generate revenue (SRECs are one source), which can then be applied to other pressing educational needs.

What is the Solar Impact of Props 1A and 1B?

California is holding a Special Election on May 19, 2009 and Eshone Energy looks at the propositions to see how they impact schools.

First, let’s look at the summaries of both Proposition 1A and 1B.

      PROP 1A: STATE BUDGET. CHANGES CALIFORNIA BUDGET PROCESS. SUMMARY: Changes the budget process. Could limit future deficits and spending by increasing the size of the state “rainy day” fund and requiring above-average revenues to be deposited into it, for use during economic downturns and other purposes. Fiscal Impact: Higher state tax revenues of roughly $16 billion from 2010–11 through 2012–13. Over time, increased amounts of money in state rainy day reserve and potentially less ups and downs in state spending.  

      Impact:  Schools would receive 1 ½% of state revenues (about $1.5 billion per year) till $9.3 billion has been paid back to schools and community colleges. 

PROP 1B:  EDUCATION FUNDING. PAYMENT PLAN.  SUMMARY: Requires supplemental payments to local school districts and community colleges to address recent budget cuts.  Annual payments begin in 2011–12.  Payments are funded from the state’s Budget Stabilization Fund until the total amount has been paid.  Payments to local school districts will be allocated in proportion to average daily attendance and may be used for classroom instruction, textbooks and other local educational programs.  Fiscal impact would depend on how current constitutional provisions would otherwise be interpreted. Potential state savings of up to several billion dollars in 2009–10 and 2010–11. Potential state costs of billions of dollars annually thereafter.

      Impact:  This is how schools would be repaid the $9.3 billion.

Actually, the CTA (California Teachers Association) is urging everyone to vote YES on all 6 propositions, stating that “Only by voting Yes on all six of these measures can we hope to contain the damage to schools throughout California.  Failure of these measures will create an immediate $6 billion hole in California’s state budget, making a bad situation even worse for our schools.”  Not a surprising stance, considering that 5,000 teachers have been laid off with thousands more jobs threatened.

The Combined Impact:  If Props 1A and 1B pass, $9.3 of the $12 billion previously cut will be returned to the schools.  If Prop 1C also passes, another $5 billion could become available on a loan basis, giving California an opportunity to move up from being ranked as 47th in the Nation in funding per student (keep in mind though, that California educates 12 ½% of the Nation’s student population).  Props 1D and 1E temporarily redirect $1.6 billion to the General Fund, which also helps schools, while 1F indirectly helps the General Fund by limiting salary increases to state officials.

The Solar Impact:  When funds are severely cut, a school district’s attention is focused solely on meeting the student’s most basic educational needs.  And while it’s true that converting to a Solar Power System frees up the money that used to pay electrical bills, it does take time and effort to move forward with projects of this size.  Passing these propositions allows school districts to breathe a sigh of relief and then turn their attention to Renewable Energy options, which, in the long run, helps the students, the economy, and the global community.

The City of Berkeley Celebrates Schools Going Solar

Eshone Energy joins in the official celebration of Washington Elementary’s successful completion and operation as the first public school in the Berkeley Unified School District to Go Solar.

It’s been six months since the Solar Power System was installed on the roof of Washington Elementary in Berkeley.  The dust has settled, the Solar Panels are running  efficiently, and people feel good about it.  Perfect reasons to throw a party and that’s just what Tom and Jane Kelly, founders of KyotoUSA did the evening of February 23, 2009 at their West Berkeley office.  This HELiOS celebration brought together many of the people who’d played some part in bringing this project to fruition.  Attendees included Berkeley Mayor, Tom Bates, Council Member and Architect of Record, Tom Butt, BUSD board members, Eshone Energy, Facilities Director Lew Jones, parents, a folk singer, students and a host of sponsors who’d devoted money, time and energy to this Solar Project.   

What makes this particular solar project significant, aside from being the first public school in the district to Go Solar and being the largest Solar Project thus far for Berkeley, is that it’s an excellent model illustrating how well the individual school’s needs are addressed when it comes to creating the best Solar Power System for the school.  Tom Kelly’s HELiOS Model showed how to install a Renewable Energy System on their school while making it cost-neutral for the School District from day one.  And Eshone Energy carried out an energy audit that allowed the school to strategize on how to reduce their carbon footprint in the most cost effective way (this Energy Audit is a free service provided to those schools that want to be ready to go when the Stimulus Package funding arrives).

Yoel Hanegbi, the CEO of Eshone Energy, said, “Eshone always works with the school to find the optimal design and funding.  In this case, we ran into the unexpected condition in the roof structure and worked with the architect and the DSA to approve our alternative solution in record time, allowing us to flip the switch on schedule.”

Another feature specific to Washington Elementary was the installation of water bibs, which helps with the system maintenance. “In addition,” said Guy Robby, Operations Manager, “Eshone installed an upgrade feature from Fat Spaniel, a weather station that incorporates real time measurements and can be viewed on the web.  This is useful for marketing and education as well as for operations and maintenance purposes.”

Julia Jafari, Eshone’s Regulation and Compliance Manager points out that, “Eshone is very attentive to the local needs of the community when we install Solar Power Systems.  In each project, we contact the local government to learn about their training center, tap into their resources, and employ local employees and apprentices whenever possible.”

The thing about Schools Going Solar is that it becomes fertile ground for other Green Projects.  Going Solar stimulates students, parents, board members, and the surrounding community into taking positive action.  “When a group of parents at Washington School first heard the news that there was a proposal for their school to be retrofitted with solar panels, it caused quite a buzz”, says Linda Currie, a graphic designer (Download SamTrans3.10.09webnew) and a former parent at Washington School.  “After Tom Kelly brought news of the proposal to a PTA meeting, parents formed a working group and this group worked with Tom, coming up with some good ideas for energy efficiencies.”

Linda goes on to note that soon the word got out to the teachers, students and community as a whole.  A new awareness arose. Parents started working with Safe Routes for Schools, a county-wide program to encourage safe ways to get students to school without being driven. Folk singer Nancy Schimmel wrote a song about the Washington solar project, and soon the whole school was singing.  The PTA planned a Spring Fair, with a green-focus, to celebrate the kick-off of the upcoming solar installation. The fair was complete with a station for making solar ovens out of a pizza boxes, a bike-powered smoothie maker and bike-powered hayride.  At the end of the fair, there was very little waste, thanks to the compostable cups, plates and utensils. 

“Being a part of the Washington Solar Project,” Linda concludes, “taught me that parents can be powerful agents of change in our communities in creating a more sustainable future for our children and our planet.”

Going Green is definitely bearing fruit in Berkeley…and in surrounding cities.  The success of this Berkeley Solar Project convinced three more schools in other school districts to sign construction contracts with Eshone Energy this summer.  

Here's a 3-minute video on the process, progress and completion of the project.  Bring on the sun!

Solar Compass Quicknote: Obama Signs Stimulus Bill

Obama declared Tuesday, after he’d signed the $787 billion stimulus plan, "We have begun the essential work of keeping the American dream alive in our time."

Yahoo! News noted in their news article, “Underscoring energy-related investments in the new law, Obama and Vice President Joe Biden flew separately to Denver where the president signed it at the Denver Museum of Nature & Science before roughly 250 people including alternative energy business leaders. Earlier, the pair examined solar panels on the museum's roof.”

Though a large chunk of the funds will be dedicated to stemming home foreclosures, this stimulus package also puts Obama’s energy goals into motion, including the creation of Green Jobs to help the country step away from foreign oil dependence.

Obama hopes it will create or save 3.5 million jobs as well as extend unemployment benefits.  States will get cash to prevent them from cutting aid for schools and local governments.  Billions are slated for road and bridge construction, mass transit, high-speed rail and national parks.

 

Editor’s Note:  Stay tuned to the category, Obama’s Solar Plans for the latest news as it relates to Renewable Energies.   Ingrid McCleary

Obama Supports California’s Renewable Energy Efforts

Eshone Energy applauds Obama’s recent speech at the White House where President Obama admonishes Washington’s response to California’s Renewable Energy efforts.

 “California has shown bold and bipartisan leadership through its effort to forge 21st-century standards, and over a dozen states have followed its lead,” Obama states.  “But instead of serving as a partner, Washington stood in their way. This refusal to lead risks the creation of a confusing and patchwork set of standards that hurt the environment and the auto industry.”

 

Reversing the effects of Global Warming requires world-wide efforts on the part of the governments and its citizens.  In the United States, while each person, city, state can implement change, patchwork standards are a very real possibility if Washington doesn’t provide the necessary unifying leadership. “The days of Washington dragging its heels are over…We cannot afford to pass the buck or push the burden onto the states,” Obama then went on to say, “that's why I'm directing the Environmental Protection Agency to immediately review the denial of the California waiver request and determine the best way forward. This will help us create incentives to develop new energy that will make us less dependent on the oil that endangers our security, our economy and our planet.”

 

Based on this speech, the Huffington Post, felt that “California was handed a big environmental victory when President Barack Obama endorsed a key part of the state's greenhouse gas reduction plan.  He also gave a public boost to the Golden State, offering a clear sign that liberal-leaning California can expect a friendly relationship with his administration after eight years of clashes with former President George W. Bush.”

 

As expected, this recent news has California Governor Arnold Schwarzenegger feeling pumped.  "For too long, Washington has been asleep at the wheel when it comes to the environment," he said.  "Now California finally has a partner and an ally in Washington, in the White House."

 

Below are a few of the latest and greatest Obama led efforts towards renewable energy while keeping an eye out specifically to help put Solar Power in Schools:

• As noted at PV-tech.org on January 29, 2009: “The U.S. House of Representatives last night passed President Obama's $819 billion stimulus bill that looks set to benefit the renewable energy industries. The bill features a provision that will allow projects to convert investment tax credits into direct payments to investors in those projects for the next two years. However, there is some doubt amid this cause for jubilance, as it seems there is a second version of the same bill being passed around the U.S. Senate that omits this provision. While it is claimed that the two versions of the bill will be merged at some point in the future, the Senate will vote on its version of the bill next week and it is a cause for concern for the solar industry that the provision might eventually be phased out of the merged bill…”
• As noted in CNNMoney.com on February 4, 2009, writer Steve Hargreaves asks, A big chunk of the nearly $900 billion economic rescue package may go to alternative energy and environmental projects. Who will benefit, and is it enough? 
  

Here are a few of the grant breakdowns:

• Renewable energy loans - $8 - $10 billion. This funding will allow for stalled projects to continue and new projects to be launched.
• Smart grid - $4.5 billion to go towards a digitized power grid. The money would be used for matching grants to utilities and to set up pilot programs in select cities.
• Large renewable projects - $17 billion for tax credits against prior profits.
• Renewable energy bonds - $1.5 billion – Allows local and state governments to raise money for renewable energy projects by issuing bonds backed by the federal government.
• Renewable energy manufacturing - $1.4 billion - In Senate version only - Tax credits for companies who manufacture renewable energy components such as solar panels.
• Small scale renewables - $1 billion – Removing the cap on the 30% tax credit for businesses investing in solar power.
  

Editor’s Note:  Stay tuned for more details as they are unearthed.  Please feel free to post your comments and questions below and Eshone Energy will do their best to dig up the facts that you need.  Ingrid McCleary

Grid Neutral Schools: What are they & where can I get one?

According to the publication, "Grid Neutral: Electrical Independence for California Schools and Community Colleges”, going Grid Neutral isn’t a challenge, it’s an opportunity. 

California's leadership in the support for Renewable Energies has been getting a lot of attention lately.  And this latest arrival addresses the needs of our valued institutions, schools.

What is a Grid Neutral School?  A grid neutral school is any school that produces at least as much electricity as it consumes in a year.

Where can I get one?  Any school can become Grid Neutral.  But as with most construction involving schools, it usually comes down to the funding.   That’s where this guide comes in.  The SCSA (California's State & Consumer Services Agency) released this free publication, a 49-page, step-by-step guide on how to cut energy costs via on-site electricity generation.

State Government is going proactive by encouraging all California schools to “go off grid”.   As explained in an excerpt of this guide, the case for going Grid Neutral is clear.  “It is an opportunity to lock in electricity costs to provide financial predictability for your district and to lower energy bills…  And, if structured properly, it can all be done with no capital costs to your district.”  David F. Thorman, California State Architect goes on to note, “Electricity costs represent the key element of the business case for schools and colleges going grid neutral. Imagine  and sometimes more. Then imagine what you can do with money not spent on electricity. If a school district pays $6.2 million to its utility company per year, this might be used to hire more new teachers or purchase more than 104,000 textbooks, or buy 6,200 computers. Any one of these expenditures contributes directly to the district’s mission of educating our children.”

An example in action:  At the Contra Costa Community College District in California, Chevron Energy Solutions is installing a 3.2-megawatt system comprising photovoltaic panels mounted on 34 parking canopies at three campuses. The project is the highlight of a multi-facility energy-efficiency and solar program that is expected to save the district more than $70 million over 25 years.

But saving money isn’t the only major benefit:  Eshone Energy recently installed a 103-kw system at the Washington Elementary School in Berkeley.  Fully funded through a combination of state modernization grants, federal bonds, PG&E rebates and local school bonds, this school is now reducing green house gasses by 721 tons during the life of the system.

Governor Arnold Schwarzenegger got the ball rolling back in 2004 when he signed Executive Order S-20-04, which required schools to become resource and energy efficient.  Two years later came the Global Warming Solutions Act (AB32), mandating reduction of CO2  levels set within a specific timetable.  The state began compiling information in 2007 and 12 months later, the Grid Neutral Schools guidebook was released. 

Schools have been somewhat late jumping aboard the renewable energy bandwagon but it’s understandable as California schools are aging and most funds till now have been allocated to fixing existing buildings.  Now, schools can utilize this guidebook to get them started. 

The Grid Neutral guidebook details the various renewable energy solutions available to schools; from both a power and a thermal perspective.  Perhaps more importantly, it details the different funding options, including Power Purchase Agreements (PPAs) and state funding programs.

Last, but never least, becoming Grid Neutral also offers huge learning opportunities for children:

• Hands-on experiments and curriculum provide discovery moments by allowing students to see, hear, and experience energy generating technologies.
• Kiosks and reporting tools, complete with renewable energy systems, provide students opportunities to calculate energy production and greenhouse gas emissions, and compare data with other schools.
• Outdoor and weekend activities reinforce math and science components of renewable energy systems.
• Locate signs next to renewable energy systems describing their components and identifying their function.
• Install signs to encourage energy conservation measures, like reducing plug loads.
• Provide energy-awareness training for teachers and students.

 David F. Thorman, California State Architect summarizes it well when he states, “Grid neutrality translates into cost savings, the reduction of greenhouse gas emissions, and a healthier learning environment for our children and young people. Grid neutral schools can serve as environmental teaching laboratories.”

With President Obama newly installed in the White House, it’s already evident he’s an avid supporter of energy independence while preserving our planet’s natural resources.

Going Green has never been easier.

Becoming Grid Neutral is certainly achievable and definitely affordable.

Solar Power is a powerful means to achieve Grid Neutrality.

Third Party Ownership using Power Purchase Agreements

Eshone Energy invites guest writer Christian Paulus to discuss the details and benefits of using third party ownership models using Power Purchase Agreements (PPAs) for Solar Photovoltaic Energy systems for schools and public entities.

Third party ownership models allow schools and public entities to significantly lower the costs of solar photovoltaic (PV Solar) projects by tapping into federal tax incentives, which would not have been available to them otherwise. In addition, they allow spreading the high initial investment costs over the useful life of a system so that no up-front capital is required.  While third party ownership models have been commonplace in the private sector, their benefits are now finding wide acceptance in the public sector as well.  

In the third party ownership model, three parties are involved:
1) Consumer (i.e. schools or other public entities)
2) System owners
3) Utility company

The system owner pays and owns the PV Solar installation. He not only manages the financing, installation and all maintenance work, he also bears the entire investment risk. The school, on the other hand, signs a long-term contract known as a Power Purchase Agreement (PPA) with the system owner.  The school purchases the generated electricity and hosts the system on its facilities, typically as solar roofing on public buildings. 

• If the generated electricity is not sufficient to cover the schools’ electricity demands at a specific time, the schools can buy traditional electricity provided by the utility company.
• But if excess electricity is generated, the school can then feed the excess electricity to the utility power grid for a retail credit under the “net metering” provisions.

The system owner can also sell the “green attributes” of electricity generated using PV Solar technologies to the utility company. These “Solar Renewable Energy Certificate” credits (SRECs) help the utilities meet their compliance goals for their renewable portfolio standards. For the system owners, this provides an additional revenue stream to further lower the costs of the solar system.

 

There are significant benefits, but also some disadvantages associated with the third party ownership models and PPAs. The benefits include:

• Ability to tap into Federal Investment Tax Credits (ITC’s): The “Energy Improvement and Extension Act of 2008”, signed into law on October 3, 2008, includes an 8-year extension of the 30% residential and business Investment Tax Credit for solar systems. Since schools and public entities do not pay taxes, they can not benefit from this significant incentive. However, third party ownership models introduce a tax paying entity, allowing solar schools to tap into the federal investment tax credits and thus significantly reducing the costs of PV Solar Systems.
• Ability to tap into Federal Modified Accelerated Cost Recovery System (MACRS) and Bonus Depreciation:  The IRS allows businesses a 5-year accelerated depreciation of eligible assets such as PV Solar Systems, reducing the taxable income. If certain criteria are met, the Energy Improvement and Extension Act of 2008 also provides a bonus depreciation.
• No or low up-front costs:  The initial investment costs for PV Solar Systems can be substantial. In third party ownership models the system owner covers the investments so that schools have no or low up front costs.
• Stable and predictable electricity prices for 20 to 25 years:  In the first year of the PPA, solar schools typically pay an electricity price to system owner, which is below the current electricity retail price. This price then increases annually based on a set percentage, since average residential electricity prices have been increasing close to 5% over the last five years. The benefit for schools is to have predictable energy prices, which will not change with volatile energy markets.  
• Operation and maintenance responsibility is handled by the system owner:  The system owner’s qualified resources operate and maintain the PV Solar system, removing this burden from the schools.
• Buyout option provides ownership potentia:  There can be the option for the school to buy out the system from the system owner. In order to maximize the economic benefit, this would typically be done after six years, once the federal tax incentives are exhausted. 
• Risk avoidance:  Schools have no responsibility if the Solar Energy System does not perform and does not generate the expected electricity. However, in this case, schools would need to purchase more electricity from the utility company to cover the shortfall.

While the benefits are significant, there are a few disadvantages to consider:

• Ownership of the “clean” energy attributes:  If the school sells ownership of the Solar Renewable Energy Certificate credits (SRECs) to create an additional revenue stream, it is not accurate any more to claim “green” energy generation, as this attribute has been transferred to the buyer of the SREC. Public statements and advertisement have to be drafted carefully, but it still would be possible to claim that a “PV Solar System is being hosted”.
• Access to facility:  Ongoing site access is necessary to maintain the installed solar panels. However, in some cases, some government staff may not be comfortable with a third party accessing the facility.
• Transaction costs and contractual issues:  There are transaction costs caused by drafting the PPA, since lawyers with specialized skill sets are necessary. 
• Contractual issues:  Contractual issues can occur since most local and state governments approve funding for operating obligations on a yearly basis rather than for the full duration of the long-term PPA. However, those concerns can be addressed through specific contractual clauses (e.g. non-appropriation and non-substitution clauses).

Third party ownership models, in conjunction with PPAs, are finding widespread acceptance at schools because they’re discovering the benefits outweigh the disadvantages and allows schools to reach their Renewable Energies goals.

One If By Land, Two If By Solar

Are you the champion who brought Solar to your school?  If so, Yoel Hanegbi from Eshone Energy would like to hear from you!

With California deeply committed to Renewable Energies, we’re creating our own version of the Freedom Trail; this time seeking freedom from oppressive energy costs. 

California Governor Arnold Schwarzenegger signed the Global Warming Solutions Act (AB32) into law in 2006, which mandates that, by the year 2020, we must reduce our CO2 levels by 30% to match our 1990 levels and then another 50% by 2050.

The mandates are in place.  The tax incentives and rebates are available to help schools switch to Solar Power.  Bond measures are being passed to support modernization and new construction.  And yet, what Eshone Energy has discovered in talking with community members is that every school district has among them a Solar Champion.  One who knows that cost-effective alternatives are out there.  And one who takes the first steps to close the gap between the dream and the realization of solar for their community.

This Solar Champion is and/or could be:

• A School Board Member who is passionate about the benefits of renewable energy and understands the cost benefits for schools as well as the education opportunity for student.
• A Maintenance Manager of an elementary school who sees a way to cut electrical expenses.  The Maintenance and Operations (M&O) staff know the school’s site and equipment best and they will be integral in any Grid Neutral Planning as well as the ones who will be maintaining and operating the Solar Power Systems.
• A teacher who approaches the Community/Board Advisory Committee (CBAC).  This committee has a broad spectrum of representation and serves as a communication engine where information is gathered and disseminated, and providing the Board of Trustees with topic specific community feedback.
• A high school student who makes it his/her senior project and gets the attention of local newspapers and businesses.  Because the Senior Project is a research paper on an approved topic of the student’s choice and presented to a review panel of judges made up of teachers, administrators, and community members, the topic could ignite the review panel to carry it forward to the district.
• Parents who just put solar roofing on their home, sees how much it’s saving them each month, and further wonders why the school couldn’t be on Solar Power as well.
• You!

Are you alerting your community to the benefits of Solar Power?  Moving to Solar Power is a positive action and as such, the champion is met with enthusiasm and will find the supporters needed to take it to the next step. 

What are the key factors to getting Solar installed on your school? Below are four steps that will enable your school to become Grid Neutral (where your Solar Power System produces as much electricity as the site consumes).

Key Steps to Achieve Grid Neutral

Step 1
    For a New School: Set energy performance goals.
    For an Existing school: Measure current electricity use and set performance goals.
Step 2
    Implement and maintain appropriate energy efficiency and conservation measures to lower electricity use.
Step 3
    Install solar or wind systems to create electricity to meet remaining needs.
Step 4
    Monitor electricity consumption and production.

Click on this link to read about these steps in more detail.

    If you would like to share you thoughts, please either leave a comment for our Solar Compass Blog below or send an email to the editor@eshone-electric.com.    
    If you have any questions about how to approach your school or need information to bring to your school, please email solutions@eshone-energy.com.
    And if you’ve already started the Solar Revolution at your school and are ready to see some specifics as to the customized system and the accompanying funding options, contact press@eshone-energy.com.