Q&A with Steve Bianchi: Importance of Proactive Maintenance of Solar Energy Systems

PROACTIVE-MAINTENANCE

Starting this summer, Massachusetts is altering its solar incentive policies with changes that will  better suit real estate developers and property owners with tenant occupied buildings, than the previous SREC program.

With the expected growth of solar energy systems in the real estate sector, we thought it would be helpful to take a look at an often overlooked, but critical part, of owning a solar energy system–maintenance.

To find out more we have a Q&A with Steve Bianchi, senior vice president and general manager of customer services at Solect Energy.

Q. Why do you expect the new Massachusetts solar incentive program to create more opportunities for property owners?
A. Under the old incentive program, the energy produced by a solar system generally had to be used on-site by the entity occupying the building, which is referred to as a behind-the-meter system. Under the new Solar Massachusetts Renewable Target (SMART) incentive program, property owners have the option to build a “standalone” system, where the power is fed to the grid and the solar owner gets paid directly for the energy produced. At 20 years, the payment period is longer and more predictable, making solar projects easier to finance. Like the old incentive program the new one is a great fit for owner-occupied buildings, but it now makes the much larger market of tenant-occupied buildings more attractive, since property owners no longer have to act as a utility to the tenant and deal with the associated billing.

Q. Do solar energy systems break down?
A. With no moving parts, solar energy systems are pretty robust. However, owners should not be lulled into complacency. Some problems, like a tree falling on your roof, are easy to identify. But other problems may not be visible to the owner. If something goes wrong that causes the efficiency of the system to decline, like a problem with the inverter, owners are often not aware that there is an issue. Sometimes it can go undetected for months, costing valuable revenue. Many times the owner won’t find out until they get their quarterly check from the utility and discover that it’s a lot lower than what it should be.

Q. So how can a solar owner determine if their system is running at peak efficiency?
A. Without the proper software and diagnostic tools it is difficult for owners to determine if their systems are operating at peak efficiency. However, with an energy services agreement, owners can solve this problem by having professionals monitor the system on a 24/7 basis and perform proactive maintenance to prevent any surprises and keep the system operating at peak capacity.  If there is a problem it can be quickly identified and brought back on-line. For example, in the last storm we identified an outage for a customer on Sunday, and scheduled a crew to repair it on Monday. Without the monitoring, the owner may not have even known there was a problem and would likely have had a hard time getting it repaired quickly after a major Nor’Easter.

Q. Are service agreements a good idea?
A. Our experience tells us that preventing or fixing even one significant problem can pay for the entire contract. You also need to remember that it’s more than just proactive system maintenance and quickly fixing problems. There are many other opportunities to enhance your ROI; for example, handling the billing and utility interaction is another area where a service agreement can produce dividends. Utility bills are famously complicated and having a third party to verify whether you’re receiving the full value for the power you’re producing, and to catch billing discrepancies is important.  Based on the information on your utility bill, a services provider might recommend certain adjustments be made to your system based on your tariff, your energy requirements, new incentives and new technologies like energy storage.

Property owners understand the importance of maintaining their assets and this is equally true for solar energy systems. A properly maintained and serviced system will be more efficient, produce more revenue and will maximize the system’s ROI and resale value.

 

State Energy Policy for Storage Requires Interim Step to Achieve Long-Term Vision

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Ken Driscoll
Ken Driscoll, Founder CEO Solect Energy

Last week Governor Baker submitted a significant bond bill to the legislature calling for a $1.4B authorization for climate adaptation, mitigation and infrastructure investment. While the dollar amounts grab the headlines, there is also an important and innovative piece of policy buried within the bill, establishing a “clean peak energy standard” (CPS).  A clean peak standard is an innovative market-based approach to address one of our biggest energy challenges: the expensive process of meeting peak energy demand. The concept is similar to the State’s Renewable Portfolio Standard (RPS), an established and successful program that uses market pricing signals to create demand for renewable energy by requiring utilities to purchase a certain percentage of their load from clean power sources.

Reducing the peak load of the grid can have a big impact on energy prices. According to a 2016 Massachusetts DOER energy storage study, the top 1% of peak electricity demand hours account for 8% of electric energy costs, while the top 10% of hours account for 40% of overall electric energy costs.

The Governor’s idea is to meet that demand with clean energy resources. This has the obvious benefit of lowering the emission impacts from dirty “peaker plants” and reducing the need to “overbuild” our energy system; it could also be an efficient way to establish a long-term market for energy storage. Clean resources like Solar and Wind will likely need to be paired with energy storage so that they can be called upon during times of peak usage. The idea is that the CPS, which would be implemented in 2020, should provide a framework that will send the appropriate price signals to facilitate investment into energy storage.

To date, the State has focused their effort on building the energy storage market mostly by supporting demonstration programs. This is useful for proving out new technologies and exploring different applications, but it doesn’t establish the market pricing signals provided by the CPS. What’s missing is a strategy to move from the demonstration projects to the new CPS.

It is expected that the CPS will have an “out” similar to the RPS in that utilities will have the option to pay an “alternative compliance payment” (APC) if the cost of procuring clean peak energy is too high. Our concern is that when the CPS is initiated, the market will not be ready for it. To solve this problem the administration needs to think about a medium term solution that would be a bridge between demonstration projects and the end market of the CPS. One possible approach could be a rebate program for energy storage systems, which could fit the bill perfectly. Rebate programs have been successfully used to jump-start solar energy and electric vehicles, and would be a perfect solution to prime the market and drive down costs in anticipation of the CPS. Indeed, the Governor’s bill hints that this may be a solution by specifically authorizing the use of energy efficiency funds for energy storage.

Of course, the CPS is not the only tool available to the state for developing a long-term market.  They should continue to advance equally important and complementary policies such as establishing long-term storage goals, including storage in the Alternative Portfolio Standard, clarifying ISO rules about participation in capacity markets and increasing the RPS. Both the Administration and the legislature deserve credit for their foresight in addressing our longer-term energy challenges, but in this case we think a little more focus on the short-to-medium term would serve us well, and we encourage a sense of urgency.

Celebrating Harvard’s New, Ultra-efficient Building – HouseZero

We wanted to extend our congratulations to Harvard’s Center for Green Buildings and Cities (CGBC) – a part of the Harvard University Graduate School of Design (GSD).  On Wednesday, the CGBC marked the completion of the transformation of its headquarters into an ultra-efficient building, now dubbed HouseZero. The comprehensive retrofit of the 1940’s stick house was spearheaded by Ali Malkawi, professor of architectural technology at the GSD, and the founding director of the Harvard CGBC. The goal of the project was to demonstrate how companies and homeowners can respond to a worldwide problem – highly inefficient existing buildings. Previously, it was only thought possible to achieve ultra-high levels of energy efficiency in new construction. This multi-dimensional project will serve as a living prototype, demonstrating how existing building stock can take advantage of new energy efficient technologies and techniques.  

 

HouseZero’s retrofit design does not require a HVAC system, uses no day-time electric light, provides its own 100% ventilation, requires almost zero energy, and produces zero carbon emissions, including embodied energy of materials.  It also features an experimental lab that is hardwired to the building’s energy exchange system. The lab will monitor the structure and its systems, allowing for the testing and optimization of the new intelligent technologies, façades, and materials. The data will be made public with the intention of giving property owners better insight into how to transform their own properties, and hopefully inspiring the next generation of ultra-efficient buildings.

 

Solect is honored to be a technology partner to the HouseZero project, contributing our solar and storage solutions. We commend Ali Malkawi, his team at CGBC and the many partners who brought this project to fruition. We congratulate them on achieving a paradigm shift in energy efficiency in existing structures, and for showcasing the benefits available to both companies and homeowners.

 

To read more about HouseZero:

https://harvardmagazine.com/2017/08/harvard-s-housezero-emissions-green-building

Harvard CGBC:  http://harvardcgbc.org/

Statement from Solect Energy Regarding Solar Energy Systems and Severe Storm Impacts

Solar Panel Care Severe Storm

In light of the recent severe storms that have affected the entire Northeast, Solect Energy, a leading provider of commercial scale solar energy systems, has issued the following guidelines for owners of solar systems to help them better manage their solar assets during and after storms.

Dealing with snow:

Solar energy systems are designed to bear the weight of snow and can handle the additional loads. Owners should not try to clear snow themselves but call a qualified professional who is familiar with solar panels. Many solar companies will provide this service.

Emergency power:

Many people wrongly believe that a solar energy system will provide them power during an outage. However, when the power goes out on your street, the solar energy system is required to shut off in order to protect the crews who are out repairing the lines. In other words, if you lose power from the grid, the system will shut down. However, solar can be used to provide emergency power if it is paired with an energy storage system (i.e., a battery).

Out of sight shouldn’t mean out of mind:

Solar systems are quiet and located on the roof where owners don’t really think about them. However storms can potentially affect the performance of a system and owners may not be aware of the problem, losing valuable revenue–perhaps for months. Solar companies can now monitor for problems remotely and let the owner know if there is a problem.

You aren’t losing a lot of revenue:

True, snow can block sunlight and limit the amount of energy being produced by the solar panels. However, keep in mind that the original investment analysis will usually include an assumption that there would be days when the panels are covered with snow. The danger and risk of damaging the system by clearing the snow yourself far outweigh the negligible benefit of clearing the snow.

Cold and snow can be advantageous:

Electronics don’t like hot weather and solar energy systems run more efficiently when its colder. Melting snow can also act as a natural cleaner. Similar to a squeegee, as snow melts off the panel it can remove grime, bird droppings and other residues that may have collected on the panels.

Get your system checked after the storm:

Owners may not be aware that their system is damaged so it’s a good idea to get it checked after a storm. You may consider an on-going monitoring service offered by some solar companies that constantly monitors the system’s efficiency, identifies outages in real time and can quickly dispatch crews to make repairs.

The New Massachusetts Solar Incentive Program is a “SMART” Investment for Real Estate Owners

SMART Real Estate Solar Energy

Starting July 1, 2018, Massachusetts will be switching to a new incentive program for solar energy systems. The new program is called the Solar Massachusetts Renewable Target, or simply, the SMART program. The existing program, known as SREC II, will continue up until the transition date. The new program makes a number of significant changes that will benefit building owners and real estate developers. Listed below are the top 5 differences that will make the SMART program a better fit for the real estate industry.

Simplicity:

Under the existing Massachusetts program, solar energy was incentivized in two ways. The first was the ability to “net meter” – essentially allowing consumers to sell their excess power back to the utility at a retail rate, literally turning the meter backwards. The other incentive was a Solar Renewable Energy Certificate (SREC). Utilities are required each year to match a certain percentage of their electric load by buying SRECs which were sold through an auction. For the SMART program, building owners will get paid a predetermined rate for the energy they produce. This eliminates the need to find “offtakers” for any excess energy they produce. In addition, they will get paid directly from the utility every month as opposed to an unpredictable 8 week window, and no predetermined value, for SRECs. All of this will make it much easier to predict revenue and energy cost savings. Lastly, by allowing project owners to sell their energy directly to utilities, this avoids net metering and the associated caps that are set by the state.

Greater Flexibility:

Under the SMART program, building owners have two options when they install a solar energy system. The first would be to set up the system “behind the meter” (BTM). This means the building owner will be using solar energy instead of costly power purchased from the utility, and will get a fixed incentive payment from the utility on a monthly basis for twenty years. The other option is to establish a “stand alone” project where the system owner will receive a predetermined rate for the energy it supplies, or essentially “sells”, to the utility. In this scenario, the owner does not require a load and there is no need to involve a tenant. The solar energy system simply becomes a revenue generating asset that increases the valuation of the building. .

More Bankable:

The SREC program worked well because it provided an auction mechanism for solar energy credits. This played a crucial role in balancing supply and demand and allowed Massachusetts to avoid some of the boom and bust cycles experienced by other states. However, the auction mechanism also created uncertainty and risk for solar owners. In turn, this added complexity to the financing process. For the SMART program, commercial-scale solar owners will be guaranteed  their rate of compensation for 20 years. This  predictable revenue stream means that projects are more bankable, helping cash flows and lowering cost of capital.

A Better Fit for Tenant Occupied Buildings:

For owner occupied buildings, the SREC program worked well as they could site projects “behind the meter” and significantly reduce their energy costs. However, many real estate owners only have a house meter, and tenants have their own meters and pay their utility bills. Under the SMART program, building owners with a small “house load” can install a standalone system where they sell solar energy directly to the utility for a predictable long term payment schedule. This allows owners to turn their roofs into revenue generators and avoid the headache of finding energy off-takers and acting as a utility for their tenants. Put another way, owners can now think of a solar energy system as an additional tenant, that signs a 20 year lease, makes every monthly payment on time and never has a complaint!

Real Estate Friendly Adders:

Lastly, the SMART program has specific value “adders.” These are extra levels of compensation to encourage certain types of projects such as low-income housing, brownfields redevelopment, and community solar projects. There is also an adder for rooftop mounted systems, which is good news for building owners who can turn their roofs into revenue generating assets.

The new SMART program will be more attractive to real estate developers and building owners. In addition to the extra incentives like the adders mentioned above, it is also a simpler mechanism that will be easier to finance. Perhaps most importantly, SMART provides an incentive for building owners which does not rely on having on-site electrical demand. This means owners can directly receive financial benefits of turning their property into a solar energy supplier, regardless of whether or not there is a tenant in the building. Early indications are that many projects are already queuing up for the SMART program. This is important to understand because each time the program hits 200 MW of installed capacity, the incentive will decline slightly for the next 200 MW block. Finally, in addition to the SMART benefits, projects remain eligible for the 30% Investment Tax Credit (ITC) in addition to the new tax law allowing for 100% depreciation in year one! That means earlier projects will receive a higher incentive and attractive tax benefits, so there is good reason to move sooner than later.

SMART real estate Solect Energy

Solect Energy Sees Acceleration in Solar Adoption by Massachusetts Municipalities, Schools and Nonprofits

Municipal Nonprofit School Solar

Solect and PowerOptions Save Customers More than $20 Million

The budget climate is tough all around, but no where is it as challenging as in nonprofits and municipalities, schools, housing authorities and human services organizations.  As administrators sharpen their pencils and look for ways to trim ever rising operating costs, a large line item calls out for careful scrutiny – energy expenses.  In New England we have some of the highest energy costs in the country, yet many New England states, with Massachusetts at the forefront, also have had the foresight to support renewable energy alternatives -–especially solar. With incentives in place, the calculus of solar energy has caught the attention of non-profit and municipal customers.

At Solect we’re seeing that compelling math prompt an acceleration of solar energy adoption by municipalities, schools and nonprofits across Massachusetts. Working in conjunction with our partner PowerOptions, the region’s largest energy buying consortium exclusively serving nonprofits, Solect has already installed 4.2 megawatts (MW) for various schools, nonprofits and municipalities, and is on track to install another 4.5 MW under the SREC-II program for a total of 8.7MW.

This translates into serious savings for these organizations and institutions.  If we aggregate our current base of installed systems under the Solect & PowerOptions Solar Program, we project we will have saved these institutional, educational and municipal customers more than $20 million over the course of their 20-year agreements. Those are numbers that make administrators sit up and take notice.  The best part is that the savings realized through the program are substantial and translate into funds that can be redirected from an expense line into programs and services that make a real difference in our communities.

How Does it Work?

As nonprofits, municipalities, schools, housing authorities, and human service organizations cannot capture federal tax benefits for renewable energy systems on their own. However, working with PowerOptions and Solect, these customers are able to finance and construct their solar arrays with no up-front investment through a Power Purchase Agreement (PPA).  Under the PPA, Solect installs, owns and operates the solar arrays, and sells the power generated back to the entity at a reduced, fixed rate for the duration of a 20-year agreement.

What makes the Solect & PowerOptions PPA so attractive for cities, towns, and schools is that they can leverage the RFP Solect won with PowerOptions, and avoid the cost, time and expertise needed to conduct their own RFP.  The Solect &PowerOptions PPA complies with state procurement regulations, and offers outstanding savings and contract terms for the customer.

Almost as valuable as reducing energy costs, the PPA contract provides for fixed costs that allow for more accurate budgeting and planning. It eliminates the frustration of unplanned seasonal spikes and constantly fluctuating electricity costs. In addition to cost predictability and savings, schools, towns and other nonprofits can implement their solar projects without the need for any upfront costs or ongoing maintenance responsibilities.  How attractive is that?

School’s interest in solar is particularly keen. In addition to the benefits outlined above, solar in schools offers a highly relevant teaching tool for STEM (Science Technology, Engineering and Math) ProgramsMany schools integrate their system into their teaching curriculums, enabling students to proactively monitor the solar array and make real-world equivalency comparisons on energy saved and environmental benefits achieved.

Currently, Massachusetts ranks fifth nationally in K-12 school solar adoption according to a Nov. 2017 report from the Solar Energy Industries Association (SEIA) and The Solar Foundation. Across the state, more than 260 schools have installed nearly 54MW of solar.

MassSolar projects that 82% of schools in Massachusetts can save money by “going solar” and there is a potential for another 2,000 installations totaling 148 MW. If every school in Massachusetts that could go solar did, an estimated $74 million could be saved over the life of the projects.

MassSolar also reports that 175 cities and towns in Massachusetts host one or more of their own solar projects. The more than 400 municipal projects have a combined capacity of over 340 MW.

Below are some of the towns and organizations who are reaping the benefits of solar energy.

Fitchburg Public Schools

Fitchburg Public Schools installed two rooftop solar systems totaling 603 kilowatts (kW) on its Reingold Elementary School and Memorial Middle School. The savings forecast for both the Reingold Elementary School and the Memorial Middle School is nearly 1 million dollars combined over the term of the agreement. As an early adopter of solar, Fitchburg Public Schools was able to take advantage of the existing state incentive program and maximize their savings without any out of pocket expenses.

 

Fairhaven Housing Authority

Fairhaven Housing Authority (FHA), a public housing provider, installed a 236 kilowatt (kW) solar energy system on the roof of its largest housing complex. FHA anticipates the array will provide up to 40 percent of the facility’s annual electricity, and projects a $467,000 in savings over the life of the 20-year agreement.

 

Haverhill City Hall

The City of Haverhill installed a 170 kilowatt (kW) rooftop solar system on its City Hall, and an 80 kW rooftop solar array on the city’s maintenance garage. The installations will allow Haverhill to reduce its energy costs and become more sustainable.  With the installation of the rooftop arrays, the city now expects to save approximately $22,000 annually.

 

Somerset Berkley

The Somerset Berkley Regional School District installed a 348 kilowatt (kW) solar energy system on the roof of its regional high school. The array is expected to cover up to 20 percent of the school’s annual electricity use, and to save the school approximately $20,000 in year one on its energy expenses. The school anticipates nearly half a million dollars in savings over the term of the agreement, for zero money out of pocket.

 

MetroWest YMCA

MetroWest YMCA installed a 144 kilowatt (kW) solar energy system on the roof of its Framingham facility. The array consists of 374 photovoltaic (PV) panels, which are projected to produce 154,000 kilowatt hours (kWh) of energy annually. That is enough energy to charge 7,700 electric vehicles or 30,800,000 smart phones annually.  MetroWest YMCA anticipates the array will provide up to 13 percent of its facility’s annual electricity, for a projected yearly savings of more than $10,000.

 

Solar energy is a tried and true solution that is delivering real value to schools, municipalities, human services organizations and other nonprofits.  Solect takes great pride in the organizations it has helped with its PPA program.  Learn more about how other non-profit and municipalities are deploying solar, and about the specifics of the Solect/PowerOptions PPA.  Experience firsthand the benefits and savings your colleagues have achieved.

Nonprofit Solar Energy

[NEREJ Feature] Shifting Energy Landscape Represents an Opportunity for Commercial Real Estate and Growing Cannabis Industry

DOER solar incentive update smart

Changes could make it easier, more flexible for commercial real estate owners to provide benefits to growers.

Recreational marijuana sales in Massachusetts are scheduled to begin on July 1st. Many medicinal growers plan to supply the recreational market, but will need to increase their production and expand their operational footprint to meet projected demand. This translates to additional square footage and increased energy costs.

In an earlier article for NEREJ, we described the energy related challenges facing the cannabis industry. Cannabis growing in the Northeast will likely be the most energy intensive agricultural business in the world where energy consumption can represent up to 50% of the wholesale cost of the final product.

Energy in the Northeast is expensive, however the typical energy bill for consumers is around the national average. Put another way, rates are high but bills are lower. This is due to forward-looking policies that promote energy efficiency and allow consumers to take advantage of low carbon sources of energy (like solar energy) at prices that are cheaper than traditional, fossil-based sources of energy. However, many of these policies are undergoing significant changes that will affect businesses with high energy demands, such as cannabis growers. Listed below are three of the most important developments to monitor, and potential ways that commercial real estate owners (especially those who also operate a cannabis growing facility) could take advantage of the changes.

Solar Energy Incentives

Solar energy policies in the Northeast, and particularly in Massachusetts, have been very successful, ushering in a new industry that has saved consumers money while also lowering the region’s carbon emissions. However, one of the key components of the Massachusetts’ solar incentive program, the Solar Renewable Energy Certificate (SREC), is being replaced by a new program called Solar Massachusetts Renewable Target (SMART). We have written previously on this important change so we won’t go into great detail, but essentially the program shifts the incentive from a renewable energy certificate that is sold to retail energy suppliers, to a feed-in tariff (FIT) model delivered through our regulated utilities. A FIT incentive is more “bankable” since building owners will know exactly what they will get paid over the 20-year term.  The base tariff rates for the SMART program look very favorable for a growing facility that operates in a large commercial building and has a high energy demand. One downside is the program has  declining blocks, and the incentive will be reduced by 4% as the blocks are filled, so commercial-scale growers would be smart to pursue solar projects earlier in the program. The primary barrier to enter the program is obtaining an interconnection service agreement with the utility. It can take up to 5 months to obtain an ISA with your local utility, so interested parties should start this process during your design phase.

Energy Storage

Commercial customers in Massachusetts face some of the highest demand charges in the country. Demand charges are part of the energy bill from the utility that is based on a customer’s peak energy usage for a single 15-minute window each month. Energy storage can lower a customers peak demand by storing energy when the facility is using less power, then deploying it during the peaks. This can dramatically reduce a customer’s demand charges because they typically account for 30-70% of a customer’s bill. Energy storage policies are still being developed across the Northeast, with many programs currently focusing on demonstration projects. The good news is that regulators understand the benefits of storage and are considering a range of different options to incentivize the market, including rebate policies and inclusion of energy storage into an Alternative Portfolio Standard (APS). The SMART program in Massachusetts provides additional incentives for Solar + Storage systems, and the 30% Federal tax credit can be applied when using storage coupled with solar. Together these incentives allow a unique opportunity for grow facilities to reduce energy costs while using clean, renewable energy.

Energy Efficiency Programs

Energy efficiency policies help energy consumers to reduce costs through a number of different programs and incentives. The funds for these programs mostly come from “system benefits” charges for energy consumers; the benefits they provide in lowering overall costs outweigh the charges. Energy efficiency programs can cover a wide range of different efforts ranging from technical assistance to rebate programs. A database of incentive programs can be found at the Massachusetts Database of State Incentives for Renewables and Efficiency (DSIRE Massachusetts). The state runs their energy efficiency programs in three year plans, so starting next year (2019) there will likely be a number of new incentives and rebates that will be beneficial to growers.

The July 1, 2018 target for the launch of recreational marijuana in Massachusetts means that both growers and retailers have a lot to get done if they want to meet the expected demand.   However, these policy changes should help growers, building owners and developers to reduce costs, build resiliency and lower carbon footprints and we think that’s good news for the industry.

Cannabis Solar

Municipalities and Solar

Municipalities and Solar

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) ProgramsMany 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.

Solect Municipal Solar