Technology Coordinators, LLC

List of Arizona Schools Installing Solar Increasing

by | May 31, 2013 | Non-Taxable Entity, Renewable Energy, School, Solar | 0 comments

Tanque Verde Unified School District in Tucson, AZ, is going green on all four of its campuses with solar power installations expected to generate 2 million kilowatt-hours each year.  The district expects the installations to cover 70 percent of the energy usage across the four campuses.

The district avoided any upfront investment utilizing a 25-year solar services agreement under which a third party sells all of the power generated from the systems to the school, while local utility provider Tucson Electric Power has agreed to purchase all of the environmental attributes generated by the system in the form of renewable energy credits.

The Somerton School District has completed an aggregate 1.6-megawatt (DC) solar generation project in Yuma County, Ariz. Located at five sites: Desert Sonora Elementary School, Orange Grove Elementary School, Somerton Middle School, Tierra del Sol Elementary School and Valle del Encanto Learning Center.  The installations are expected to collectively generate enough electricity to meet approximately 60 percent of the schools’ electricity needs.

Again, the district avoided any upfront investment.  A third party owns and maintains the solar power systems which in turn sells the electricity generated by the solar panels to the Somerton School District under a 20-year solar services agreement.  The system is expected to generate approximately 2.3 million kilowatt-hours of electricity per year.

Washington Elementary School District completed a 961 kW solar energy project for Sunnyslope Elementary School and Mountain View Elementary School in North Phoenix also utilizing a third party power purchase format.

The Star Charter School in a rural community outside Flagstaff has 100 solar panels powering its building and is reportedly the first school in the United States to run entirely off renewable energy.  Solar energy helps provide 37 kilowatts of electricity to the school.

Twelve schools have recently commissioned solar installations owned and operated by Arizona Public Service Company as part of its Solar for Schools Program:

Greenway Elementary School in Bisbee (117 kW), Lowell Primary School in Bisbee (158 kW), Bisbee High School in Bisbee (412 kW), Tombstone High School in Tombstone (301 kW), Meyer Elementary School in Tempe (133 kW), Copper Rim Elementary School in Globe (275 kW), High Desert Middle School in Globe (350 kW), Evergreen Elementary School in Casa Grande (309 kW), Mesquite Elementary School in Tucson (349 kW), Glassford Hills Middle School in Prescott Valley (349 kW), Coyote Springs Elementary School in Prescott Valley (349 kW), and Granville Elementary School in Prescott Valley (349 kW).

In most if not all of these cases, each District is pursuing operating expense reductions, budget stabilization and hedging against inflation.  While these objectives are quite meritorious, as posted in our previous blog of June 1, 2012 and underscored in the Arizona Auditor General’s “Solar Alert” of July 2012, schools should “proceed cautiously and prudently” to ensure “Energy Investment Success”.

Every Energy Investment is unique as a result of the pieces that comprise the puzzle:

•      Customer – Type, Metro, Rural, Budgets, Schedules, Average Daily Membership, Political Boundary, etc

•      Utility – Ajo Improvement Company, Arizona Electric Power Cooperative, Arizona Public Service Company, Columbus Electric Cooperative, Dixie-Escalante Rural Electric Association, Duncan Valley Electric Cooperative, Garkane Energy Cooperative, Graham County Electric Cooperative, Mohave Electric Cooperative, Morenci Water and Electric Company, Navaho Tribal Utility Authority, Navopache Electric Cooperative, Noble Americas Energy Solutions, Salt River Project, Sulphur Springs Valley Electric Cooperative, Trico Electric Cooperative, Tucson Electric Power Company, UNS Electric (Unisource)

•      Jurisdiction & Code Requirements – City, County, State, Federal

•      Vendors – Developers, Engineers, Financing, General Contractors, Subcontractors, etc

•      Energy Infrastructure – New, Old, Energy Efficiencies, Maintenance, Operation, etc

•      Climate – Desert, Mountains, Precipitation, Winds, Seasonal Patterns, etc

•      Funding – Bond, Lease-Purchase, Power Purchase, Performance Contract, etc

•      Ownership – Direct, 3rd Party, Cooperative

Complicating matters further are the numerous pitfalls encountered in the pursuit, some of which are:

•      Lack of Utility Tariff Study – Separate and identify specific electric expenditures for generation versus demand and transmission, then establish a minimum of 20 years of inflation history for each cost component. 

•      Oversimplified Cost Avoidance/Savings Modeling – Actual cash flow savings is what counts, over-simplified cost avoidance models built on incomplete and often incorrect assumptions are not accurate.

•      Lack of Comprehensive Risk Assessment – Worst, Best and Average Case modeling and projections must be evaluated to fully identify and quantify the risks for all parties.  Future Utility tariffs should be considered.

•      Oversimplified Performance Baselines/Measures – All major variables impacting investment performance must be included in the baseline analysis of performance and the cost avoidance/savings models.

•      Overestimated Performance Projections – Project viability should be determined on conservative performance expectations.  Legally enforceable minimum performance guarantees should be considered.

•      Failure to Collect Contract Compliance Data – For all performance baseline adjustments identified contractually, data must be collected and a procedure must be established to verify performance compliance.

It can happen:  July 15, 2011 – Seminole Financial Services, LLC announced today the funding of a $19.0 million construction loan for REgeneration Finance to construct and install over 3 MW of photovoltaic systems at seven (7) different elementary schools in Arizona.  Once construction is completed by late 2011, Seminole will also provide permanent financing for the project.  The total project cost for this transaction is approximately $25 million.

This is the second school district Seminole and REgeneration have partnered on, the first a $19 million project in Douglas County, Colorado.  On October 11, 2012 – Regeneration Finance filed for Chapter 7 Bankruptcy in the State of Delware sending the Solar Service Agreement for this school district to the Bankruptcy “Auction Block”.

Falling victim to one or more of these pitfalls can result in not only failing to achieve the goals of the project, but also paying double your existing utility rate for the power provided at commissioning to as much as 3 to 4 times at the end of the contract or system life cycle.  The best method to realize the goals of a project and ensure its success is “Technical Advocacy”.  A Technical Advocate is a qualified renewable energy expert experienced with your Utility’s programs and procedures that serves your District without any perceived or actual conflict of interest.  Any individual or organization associated with the development of a project who is not directly compensated and responsible to the school district, generally cannot successfully fulfill this role.

Even with diminishing incentives and tax credits in today’s environment, it remains possible to develop and implement a successful renewable energy project for a commercial tariff rate, but it does require that all stakeholders remain ever diligent in avoiding a result that not only falls short of its goals but has a negative effect.

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