Developing a renewable energy system—for free
By Matthew Dembicki, Published March 15, 2010

Community colleges that want to generate their own alternative energy but can’t afford to build such systems may consider what the San Diego Community College District (SDCCD) in California is doing: It has allowed a company to build and maintain a solar energy system for its campuses, buys the power it needs for its campuses at a reduced cost and sells the rest to a utility company.

The idea for the power purchase agreement (PPA) originated from the district’s policy requiring that 10 percent to 20 percent of power for new buildings come from renewable sources, said David Umstot, the district’s vice chancellor of facilities. College officials mulled over whether to build a solar system to meet the requirement with its own funds, through bonds or through a PPA.

A PPA was attractive because there was little upfront cost for the district—it only had to pay for the landscaping and roof repairs to prepare the area that would house the solar panels, Umstot said. The contractor also takes care of the entire system—including designs, acquiring permits, construction and maintenance.

Last spring, SDCCD started a competitive process to select a company for the PPA. It chose Borrego Solar Systems because it offered a comprehensive package and would serve all aspects of the project rather than opting for a patchwork of contractors to serve different parts of the system.

The district signed a 20-year deal, which is a typical term for such agreements. After 20 years, the district can renew its contract, remove the system or buy it. In fact, SDCCD has the option to buy it at any time for fair-market value, Umstot said.

The system, which will meet 26 percent of the district’s peak electrical demand, is expected to be online in early summer and fully operational by the end of the year.

Other colleges have expressed interest in PPAs. Umstot said he’s fielded calls from colleges in North Carolina and Delaware.

“Education is probably the largest market for PPAs,” said Borrego CEO Mike Hall, whose company is developing similar systems for K-12 and universities and colleges.

The top questions prospective colleges ask are where to place such a solar system on campus and how much money it can save them, Hall said.

SDCCD is not the only two-year college in a PPA. Earlier this year, Atlantic Cape Community College (ACCC) signed a similar agreement with Pepco Energy Systems for solar power at two of the college’s campuses. Pepco will design, own and operate one of the largest land-based solar systems in New Jersey when construction is completed this fall.

The system will generate up to 48 percent of the college’s total annual electric consumption and cost substantially less than its current rate, according to ACCC. The agreement will save the college about $220,000 in its first year and up to $6.8 million over the 20-year life of the contract.

 “The project will also allow the college to model best practices in institutional leadership and management in the area of renewable energy,” said ACCC President Peter Mora.

ACCC also received a $245,000 solar rebate as a result of the agreement from the state public utilities board, which will cover the consulting costs and other fees ACCC incurred in planning the project.

The PPA also includes a free energy audit of campus facilities and an academic component that allows ACCC students to study solar energy production features.

Similar to SDCCD’s agreement, ACCC can purchase the system after its contract expires. The college also has the option to buy the system before then if both parties agree to it.