Imagine solar photovoltaic collectors on the roof of every major USM building in Portland, Gorham and Lewiston-Auburn, providing enough electricity to meet USM’s needs and often enough to sell to Central Maine Power Co.
Imagine the PV collectors get put there without any significant outlay of funds by USM, and provide electricity at a fixed price for the next ten to twenty years that is competitive with what USM pays today to CMP for our electricity.
That means no negative impact on student tuition or fees, while USM goes “green,” reduces its carbon footprint on the world, and shows some leadership in the community.
And the side benefits include predictable energy costs, something incredibly valuable to persons preparing a budget for a large institution like USM. And also incredibly valuable to students who might prefer their tuition not increase in future to pay for more expensive electricity.
All USM needs to do is pick up the phone and contact SunEdison, Sungevity or SunRun and ask for a feasibility assessment. These companies are in this business today, and they’ve found a way to reduce the front end costs of going solar electric.
This is not some kind of California dreamin’; it’s TODAY. SunEdison’s national headquarters is in Beltsville, Maryland, and they have active operations centers in New Jersey, Oregon, California, Hawaii, and Ontario, Canada.
They are big, well-established, and they already have contracts to do the same thing with Staples, Ikea, Whole Foods, Kohl’s, Costco and Wal-Mart, along with car dealerships, other universities, research parks, hospitals, federal agencies, municipal governments, utility companies, and self-storage warehouses. These organizations have two things in common with USM: a need for large amounts of low-cost electricity, and lots of roof space.
USM would not buy the equipment, but would provide the roof space and sign a power purchase agreement (PPA) with one of three competing national firms, SunEdison, Sungevity, or SunRun. USM currently has a PPA with Central Maine Power, but it’s only for a year or two, and does not guarantee a fixed price for electricity. Every time the price of oil or another fuel goes up, the price CMP charges USM goes up, and USM tuition follows shortly thereafter.
But a PPA with SunEdison, for example, would be for at least ten years at a guaranteed fixed price for the whole period. The price would be fixed by contract because it would be determined mostly by the rate of interest SunEdison would pay to private investors for financing the entire project, NOT on the price of oil or gas or another fuel that might increase suddenly. And today, interest rates are low, low, low.
That’s right, no upfront capital costs for USM, just payment of a fixed, predictable rate for electricity, a rate that is competitive and possibly lower than the local utility.
The company USM would contract with uses the PPA as collateral to secure investment capital on the open market. They also build, operate and repair the systems. USM just signs the contract and pays the utility bill. The company makes a predictable profit while USM saves money.
This arrangement involves NO risk for generation and transmission price increases during the entire period of operation, at the end of which electricity prices will certainly be more expensive than they are today. During that period, CMP will be providing electricity to customers using mostly oil and natural gas, both of which will increase in price, possibly precipitously.
This arrangement would provide an important hedge against escalating electricity prices; a smaller carbon footprint; insulation from future rate increases. Can it get any better than this?
What’s the catch? Getting somebody in the USM administration interested enough to look at it seems to be the major obstacle to doing it.
In March 2009, SunEdison went over 100Gwh of delivered PV solar electricity. Staples has 24 of their installations and is building more everyday. But don’t take my word for it. Check it out yourself at SunEdison.com, Sungevity.com, or SunRunHome.com. Shouldn’t we do this, now?
Michael S. Hamilton is a USM professor of political science who is currently teaching an advanced undergraduate class in Energy Policy Analysis and researching a book with the same title.