Schools are a black hole for energy consumption. The buildings, which often serve as the hub of communities, are open from early morning to late at night. With air conditioning or heating systems that run continually, it is not unusual for a single building to use hundreds of thousands of gallons of fossil fuel each year. While this energy consumption is a major concern to students, teachers, administrators and the community – who all wish to lessen dependence on fossil fuels – school systems are moving at a glacial pace when it comes to making environmentally conscious decision regarding what technologies should power their facilities.
One of the primary reasons why school systems get cold feet at the idea of going green is the perceived cost of deploying renewable energy systems. School budgets across the United States are incredibly tight, a situation that is exacerbated by the nation’s current economic condition. As a result, school boards are faced with having to lay off teachers and cut core programs just to remain financially viable. Now is not the time, most seem to believe, to be introducing major infrastructure projects such as solar-or wind-power systems that have large price tags attached.
These perceptions, however, are far from reality. Schools can go green by deploying rooftop solar systems or tapping into wind energy projects by using a model that requires little to no upfront costs and can result in annual savings related to powering a facility. More importantly, though, these green projects can become a showpiece for the community to see how to successfully implement a renewable energy system.
For instance, they can provide value environmental education opportunities for students. In addition, they can serve as an example to other public facilities, private buildings or even homeowners of how to effectively invest in green technology. And finally, they can serve as engines of job creation and innovation not only in their city or county, but throughout their state and across the United States.
Leveraging a Public/Private Partnership – One Successful Partnership
When faced with the prospect of electricity costs rising 4-8% annually, the Northwestern Regional School District No. 7 in Winsted, Conn., began investigating what it would take to put a solar array on the roof of its 250,000 square foot high school building. While it could technically be done, the question of how to finance such a project loomed large. The school board considered three different ways to fund it:
- Outright Purchase – The school system could pay for building and maintaining its own solar infrastructure. This model was rejected because it required bonds, which were impossible to secure at the time.
- Lease/Purchase Arrangement – Instead of bonding the full project, the school district could lease the system from a company that would finance and build the system. This model often comes with higher upfront and monthly costs and down the road would require the school district to own and operate its own solar array.
- Public/Private Partnership – With this option, the school district could find a private company to install and maintain the solar facility on its rooftop, and through a Power Purchase Agreement (PPA) pay a discounted rate for only the power produced onsite.
Ultimately, the school district concluded that the most financially sound option was to enter into a public/private partnership with MP2 Capital. MP2 provided the financing for the project and contracted with groSolar to build the system, which is comprised of almost 2,000 panels spanning 40,000 square feet of roof space. (See image below, right.)
Because MP2 is a private, for-profit entity, it could take advantage of numerous tax benefits and incentives that resulted in building the system more cost-effectively than the school district could had it attempted to do so on its own. With this agreement in hand, the school district sought and obtained a $1.72 million grant from the Connecticut Clean Energy Fund, which significantly offset the costs of the solar project. The arrangement with MP2 also allowed the school district to have the benefits of going green without the risk and complications that can come with implementing a solar solution of its own.
By initial counts, the PPA arrangement will save the school district approximately $25,000 in the first year. Those savings could grow if electricity rates in Connecticut continue to rise faster than the fixed escalating rates established in the PPA.
The savings are not the only resulting benefit. The school district received a grant from a large corporation with a local office, Alcoa, which has made a goal of investing in sustainable energy projects through grants. With the Alcoa grant, the school district was able to hire a part-time teacher, who built a curriculum centered on green science and technology, including classes that even utilize data generated from the rooftop solar panels as part of the lesson plan. That teacher also leads a “green schools” group of students, who meet to talk about ecological conservation and renewable energy issues.
Another favorable outcome is the partnership that has developed between the public school district and neighboring Northwestern Connecticut Community College. This partnership resulted in plans for an associate’s degree in Green Technology and Science at the college. Students from both the high school and college campuses take part in these shared classes, which can lead to green jobs for graduating students at a variety of entry levels. This “workforce” initiative is a key spinoff of the implementation of renewable energy programs at Northwestern Regional School District 7. Additionally, because the school district relied on contractors and suppliers in Connecticut, it was able to positively contribute to the local economy in the near-term.
Northwestern Regional School District No. 7 is not alone in leveraging this public/private partnership model for renewable energy projects. Schools across the country – including many in California and Colorado – are utilizing their rooftops and PPAs to go green in an affordable and socially responsible way.
Schools Have a Unique Opportunity
While all of us in the United States should be considering what we could do to reduce reliance on fossil fuels and end global warming, school systems have a unique opportunity to serve as a textbook example for promoting use of renewable energy. Not only can school buildings serve as a showcase for solar or wind projects, the lessons learned by students and the community are perhaps even more valuable when it comes to sustaining interest in and expanding the use of renewable energy resources.
Michael Laine (pictured top, left) is a principal at MP2 Capital. Before joining MP2, he worked in the derivatives documentation department at Barclays Global Investors, and served as the senior news editor at SNL Securities (now SNL Financial) where he was responsible for its coverage of banks, REITs, and insurance companies. He also worked a number of years as a chef and restaurateur.
Mr. Laine holds a J.D. from the University of California, Hastings College of the Law; he earned an M.A., with distinction, in American History from George Mason University and a B.A. in History from the University of Virginia.
Clinton Montgomery (pictured sitting at his desk, left) has worked as a school administrator for thirty years starting as a principal and eventually working up to his current position of superintendent of schools for a regional school district in northwestern Connecticut. Prior to his move to education, Mr. Montgomery worked in the development of psychiatric treatment programs for children and adolescents. He has continued to consult in the areas of program development and bilingual psychology in both Connecticut and New Mexico.
Before gaining postgraduate degrees from the University of Rhode Island and the University of Connecticut, he worked in the sign maker, making carved signs for businesses and boats in Rhode Island.