School Solar Tries Again

The Lansing School District has been trying to save energy dollars by contracting with a developer to generate solar energy since 2013.  At first it appeared the District could save $1,055,067 over the course of a 20 year contract.  But over time the attempt has hit many speed bumps, including a change to the contract that would have halved the savings and raised the time frame to 25 years.  Consultant Chris Chris Santospirito told the Board of Education Monday that she had planned to tell them why the project was dead.  But a last minute offer from the developer may breathe life into the project.

"We were going to say we're done!  We're walking away.  And then they came back and said 'we can tweak this a little bit more.  We think we can make this work a little bit better.'  This bumps up the savings to about $550,000.  Instead of $17,000 savings a year it's more like $20,000 to $26,000 depending on the year you're in."

If a new contract is signed and the project can be completed before the NYS Public Service Commission (PSC) deadline runs out at the end of this year, Pennsylvania-based RER Energy Group would construct 1.5MW solar array on property leased from Hardie Farm in North Lansing.  The array would consist of about 5,000 solar modules that are expected to produce 1,712,542 kWh per year.  The district uses approximately 2.5 million kilowatt hours of electricity per year.  Through a complicated formula that calculates the amount paid by the schools to an investor and the amount paid by NYSEG  for the power generated, the district could save about $550,000, up from $478,119 over 25 years that was estimated in the February 2016 contract revision.

"I got very excited about it a couple of years ago when we were first introduced to it," said School Business Administrator Mary June King.  "We were looking at something like a $45,000 or $50,000 savings a year, conservatively.  And that savings would grow annually.  I thought that will cover a salary for a teacher -- then it all got convoluted and more difficult.  So now we're looking at a net savings around $21,000 and ranging up over the course of time -- very conservatively again -- but this is a projection we are comfortable giving you."

King and board members still have concerns, which may not be satisfied in time to complete the array before the deadline.  One is that 25 years is a long time to be locked into a technology, given exponential advances in modern technology now.  King said she and others would be researching community solar as an alternative, and School Board President Christine Iacobucci raised a number of concerns about problems with solar projects in other communities.

"There's a 2016 report by the Climate Works For All Coalition," she said.  "They're for solar, but they're against PPAs. One big concern is a financial concern that theses PPAs exist for 20 to 25 years and typically result in 2% to 5% savings.  It's in the PPA's best interest because the solar developer typically collects 80% of the financial benefits of this system."

She also noted that the District's attorneys had recommended against signing the Power Purchase Agreement.  But King noted that they didn't like the financial aspect, and had not recommended against it on legal terms.  She said she would be asking for a legal opinion on the new proposal before the Board is asked to consider signing.

The PPA is made possible because of a Block 2 NYSERDA (New York State Energy Research & Development Authority) grant that locks in lower costs, but the grant disappear at the end of 2017 unless the projects are completed by that deadline.  That may not be enough time to complete the Lansing project, even if the Board votes to go forward with it soon.  But Santospirito said it is worth pursuing because of the potential savings

"I don't want to say that this is the only way to do solar -- it is not.  It is a way," she said.  "I happen to be of the personal belief that it is probably the best way in terms of how you get your savings, because this is the only thing that I've seen that lets you apply the savings against your greatest cost, which are your demand costs on your big demand meters across campus -- your high school, your elementary school, your middle school -- those demand meters -- that's where you pay thousands of dollars every month and this is the only way we have seen that will actually allow you to pay for that with the credit that you get from the utility company, to use their credit to pay their bill.  That's why we've been fighting so hard for this."

King said she would be consulting with community members, Iacobucci and the district attorneys, and bring more information to the Board when she has it.