The Carlisle School District has already received $1,950,000 in grant money to install solar panel arrays on their main campus, but the real work began over 18 months ago, according to Director of Finance, Tom Longenecker.
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"We began planning for the electricity rate increase coming in Jan. 2010, due to the rate caps being lifted here in Pennsylvania. We began with upgrading existing inefficient equipment, replacing old lighting fixtures and installing an automated energy management software system that regulates the lighting, heating and over 2,200 computers used by the District. When they are not needed, they were turned off by the system. Because of this, we are looking at our electric bill going up by 15% instead of by 30% or more, which many municipalities are expecting."
The District received $1.0 million from the Department of Environmental Protection/PEDA, PA ARRA Info which was funneled from Federal Stimulus (ARRA) funds. As well, it received $950,000 through the Department of Community and Economic Development's Commonwealth Financing Authority. They are installing a 1.0 Mega-watt solar array and are considering installing a second Mega-watt as well.
With 14 school buildings, and approximately 5,000 students and its own Vocational-Technical School, the District spends approximately $1.2 million annually on electricity. Its Main Campus, with its six buildings houses its Vo-Tech and uses 6.5 Mega-watts of power annually. They expect the first Mega-watt array to provide 18% of the power for its Main Campus and save the District approximately $350,000 annually.
The District considered bio-gas, windmills and other alternative energy options prior to settling on solar arrays. "It just made sense, with the money being provided by Federal and State sources, solar just made more sense," commented Longenecker. The District tapped the resources of its neighbor, Dickinson College to sort out the many alternative energy options and offer guidance with applying for grants. Mr. Kenneth Shultes, Vice-President for Campus Operations provided this support and extensive knowledge regarding renewable energies.
The project includes installing four different types of solar technology. This will include a fixed photo voltaic array, a tracking system, roof mounted thin film and cylindrical solar tubes. The tracking systems are very unique since they track the path of the sun, thus providing up to 35% more energy. Data collected from these various installations will be collected, reported and published. To date, municipalities have had to rely upon the manufacturer's advertised solar production claims.
The District along with Emcor Energy Services developed a comprehensive RFQ, or Request for Qualifications. The RFQ, developed by EMCOR Energy Services of Norwalk, CT stimulated over forty companies to inquire about the project and companies visited from China, Germany and the U.S. Emcor, a multi-national electrical & mechanical engineering firm and an approved Conservation Services Provider in Pennsylvania also provides consulting and programs for the utility industry. The final decision on the selection of the vendor will occur at the Feb. 18 School Board Meeting. Assuming all the pieces come together, construction can commence anytime after March 1 and expected to be completed by October 1, 2010.
Ward Hill, of Emcor Energy Services Consulting has been assisting the District with the overall concept and helped develop the financial models as well. "The photo-voltaic industry is very dynamic and similar to the personal computer industry in its early stages. No technology or company has emerged from the pack. It is not yet a mature industry." commented Hill.
“While photo voltaic is not a mature technology, it is tried and true with at least a 30 year history of deployment. New technologies are being advanced at a steady pace through large R&D efforts and it is now possible to get a 25 year warranty on these systems. As a result of the noted R&D advances in photo voltaic technologies and manufacturing systems the price has fallen by about 30% a year over the last several years. Hence, the price for a system is now about one half of what it was only a few years ago. One challenge in designing a system is selecting the best technology from the large number of manufactures.”
"The industry is not yet at the point of producing 'grid parity pricing' or pricing that is competitive with other sources of energy without grants and other incentives. For instance, in Pennsylvania, there are only about 1,100 'full load hours/year,' a full load hour being when a system can run at full capacity. Out of 8,760 hours per year, that is only 12.6%."
The District is also integrating the plan into the curriculum in its Vo-Tech. Dr. Michele Orner, The Director at the Career Center for Technology for the District is creating a program that includes these students in the plan and working toward providing them with a Certificate in Solar & Renewable Energy. With the demand for solar and other alternative energy sources heating up, there will be more demand for educated and qualified employees. Smaller units are being provided to the District which will be used in the Vo-Tech classrooms.
"One of the most exciting aspects of this project for me was the forward thinking that the District had already put into it when I arrived in Oct.," commented Dr. Orner. "Integrating an educational component into the project is part of the core plan."
Dr. Orner applied for a classroom grant from the Department of Environmental Protection for $3,000 to help integrate 'green concepts and training' into their core classes. Currently the Vo-Tech has three core courses which are part of the grant; (1) Carpentry & Construction Trades (2) Automotive Technology and a (3) Pre-Engineering Elective. She is waiting to hear if it is approved and will find out in April when the DEP accounces the winners on Earth Day.
The District has also partnered with Wilson College in nearby Chambersburg to provide their students with hands on experiences at the College. “Students will be participating in classes and activities at the college. The Carpentry & Construction Trade program will learn about what green building entails as well as green demolition, or how to take down and apart a building to conserve the most resources. The Automotive Technology classes will learn about alternative fuels by working with the projects there that produce bio-fuels that run college vehicles. The Pre-Engineering classes will learn about the Alternative Energy field in a broader sense, including wind, bio-fuels, solar and others.
"Instead of creating a 'green track,' we are integrating green thinking and technologies into our existing programs to broaden the educational experiences for our students and prepare them for successful futures," commented Dr. Orner.
For the second Mega-watt array, Longenecker is considering a power purchase agreement. However SREC’s and Act 129 Energy Credits need to be considered. Other energy companies and solar technology providers are offering to pay for a second installation with the stipulation that they be the designated power provider. Under these terms the District would not own the equipment and pay approximately $.07/kilo-watt hour. Under this scenario, the Power Provider would be eligible for tax credits from the IRS that amount to 30% of the equipment purchase price. As a government entity, the District is not eligible for this tax credit.
SREC credits, or Solar Renewable Energy Credits allow the owner of qualified installations to sell these via exchanges authorized by the State. While this market is new in Pennsylvania, in New Jersey and California, these are already providing up to $.50-$.75/kilo-watt hour or over $500,000 on a 1 MW installation. By Longenecker’s calculations the District may earn an additional $220,000 in revenue or $.22/kilo-watt hour by selling these credits, thus, minimizing the district’s economic footprint along with their carbon footprint.
For example, Peco Energy's alternative energy goals were approved by the Pennsylvania Public Utility Commission this year. The utility proposed an SREC purchasing plan to last for the next ten years, and its approval is another excellent step forward in Pennsylvania’s solar market. Peco says it will purchase 80,000 SRECs within the decade, a potential investment of more than $24,000,000. Peco and other energy providers purchase these credits.
Under Act 129, which is the legislative action that capped electric rates 10 years ago and also provides for choice of electric providers, the District could save up to $500,000 on its solar array installation.
Governor Rendell put the state’s first solar rebate program into action earlier this year, fleshing out the solar incentive policy which had previously only included tax credits. Now, the net cost of a solar installation in Pennsylvania can be more than 60% below gross (for residential solar installations, the rebate provides up to $22,500 on top of the 15% state tax credit and the 30% federal tax credit). Potential income from the sale of SRECs can now help residential and commercial solar installations pay for themselves even more quickly.
Rendell was also behind the state’s adoption of a Renewable Portfolio Standard (RPS) back in 2004. The RPS calls for 18% of the state’s energy to come from renewable sources by 2020. Allowing Peco to purchase SRECs–as opposed to other alternative energy credits or certificates–means the market for SRECs will both firm up and, hopefully, skyrocket within the state, as other buyers will almost certainly be approved if the state approved this one.
In New Jersey, basing a solar incentive program largely around the trading of SRECs has shown great early success: each megawatt-hour of electricity produced by a solar installation is bundled and sold on the New Jersey market as a single SREC, and the proceeds go back to the owner. Each SREC has been selling for an average of over $400 (and often more like $600, though the lows have dipped under $200 per certificate).
Because tax credits don't make sense for a municipal entity, entering into a municipal lease where a bank or other institution owns the assets and can use the IRS and other credits in exchange for more favorable lease rates is a more favorable solution for a municipal entity like the Carlisle Area School District. So, Longenecker approached several banks about providing a municipal lease for the installation. So far, banks are showing interest in this proposal and are eager to participate in this emerging market.
Longenecker is seeking to create a "template for others to learn from." The partnerships between the School District, Dickinson College, the State and Federal Government, solar providers and local banks make this a Case Study that we will be following and reporting on.