Solar Power Project

Solar Power Project

Solar Power Project approved in June 2015; work to begin Summer 2016

Solar power will reduce energy costs by $200,000 – $300,000 per year for school district

In July 2015, after nearly a year of research, discussions and meetings, the Warwick Valley Central School District Board of Education approved plans to build a solar field on approximately 10 acres of excess property on the campus of Sanfordville Elementary School.

The 2-megawatt solar power project will generate energy from the sun and feed it into the local power grid. Through net metering credits for the energy from Orange and Rockland, the school district will save $200,000 to $300,000 a year in energy costs.

Earlier in the spring, the Board authorized advertising a Request for Proposals, or RFP. Six proposals were received. Bidders on the project were narrowed down to two, and at the July 6, 2015 Board of Education meeting, the Board awarded the project to Con Ed Solutions.

“What we’d like to accomplish is the elimination of an electric bill altogether for the district, while becoming a greener community.” said Superintendent Dr. David Leach. “This will allow us to put more taxpayer money into the actual education of our students, and less into overhead costs. We’re also excited about setting an example for green technology and the educational opportunity for students to learn about renewable energy.”

Why now is the right time for solar

Solar power has become much less expensive than it once was, and a recent change in New York state law has made it more attractive for schools. Previously, a district could only offset the power usage of the facility where the system was located. But that has changed to allow a system at a single location to offset total usage for all facilities owned by the district, making it much more cost-effective.

After comparing the savings benefits of a Power Purchasing Agreement (PPA) vs. an Energy Performance Contract (EPC,) the school board facilities committee recommended entering into an EPC with Con Ed Solutions, who will install the solar panels and oversee the project. Some of the reasons for selecting an EPC rather than a PPA are that with an EPC, the system is not limited to a specific size, the payback term is just eight years, the construction is eligible for New York state building aid and the cost per kilowatt-hour is negotiated as part of the contract.

With the EPC agreement, the district will own the solar panels and have an 18-year maintenance agreement with Con Ed Solutions to cover anything that may go wrong with the system. Con Ed Solutions will also maintain the land around the unit, providing mowing and weeding as necessary.

Location, cost and return on investment

The solar panels will be located on the front 10 acres (coming from Route 94) of the Sanfordville Elementary School campus. (The school sits on 120 acres total, 40 of which are currently used.) It will not displace any playground or athletic areas. The cross country track will be maintained around the solar field.

The total cost of the project is $4.7 million, which the district will borrow through bonds. Since this project is an EPC, the project is required to pay for itself, and there will be no impact on Warwick taxpayers. The project will pay for itself in savings after 12.82 years.

Moreover, the cost of electricity itself will be much less expensive with solar power. The district currently spends about 13-15 cents per kilowatt-hour for electricity. The negotiated rate once the solar power system is operational will be 3-4 cents per kilowatt-hour, saving the district about 10 cents per kilowatt-hour. New York state building aid and further incentives from NYSERDA (New York State Energy Research and Development Authority) are built in to the project.

Crews are expected to begin work in the summer of 2016, with construction taking about three months to complete. When the project is done, the solar plant is projected to provide 100 percent of the district’s electric needs, and then some.

Curriculum benefits, safety

Alternative and renewable energy, and solar in particular, will become part of the curriculum for Warwick students. Through special software, students can take daily measurements from the solar field and compute its power output. “I think it will be a very meaningful, hands-on way for students to talk about green energy within their science classes, and then say ‘Let’s go look at it,” said Dr. Leach.

For the safety of students and to protect the solar panels, the project includes security cameras and the installation of fencing and low shrubbery around the panels.

“This solar project will not only provide a return on energy for the school district, but it will also reduce our carbon footprint,” said Assistant Superintendent for Business Timothy Holmes. “It’s a win-win for the Warwick community.”

Cost Savings

The cost of the project is approximately $4,700,000. More than half of the total cost of the project will be paid for through state aid. The financial aspect of the solar project has two parts: the cost of the solar technology and the selling back of the electricity to Orange & Rockland for energy credits.

Cost of Solar Technology and Financing

While New York State will disperse its aid payments over the life of the project (15 years), and energy credits will add up once the solar field is operational, the installation of the solar field must be paid for up front. To do this, the district will borrow through bonds that carry an estimated interest rate of 3.25%. This brings the total principal plus interest to around $6,013,000:

$4,700,000 (principal) + 3.25% (interest) over 15 years = $6,013,000

State aid will generate around $2,908,000; this will leave $3,105,000 that will be made up from the energy savings credits.

See below for a detailed equation showing how the project will be paid for:

  • $4,700,000 (cost of the solar project) + $1,313,000 (estimated interest of 3.25% over 15 years) = $6,013,000 (total cost with interest)
  • $6,013,000 (total cost with interest) – $2,908,000 (state aid at 53.8 percent) = $3,105,000 (remaining cost)
  • $3,105,000 (remaining cost) – $3,105,000 (remaining cost to be paid from energy production) = $0
  • Final cost to district = $0
Energy Credits

The energy the district generates with the solar system will be sold back to Orange & Rockland for 16 cents per Kwh in the form of credits. The amount of the credits used cannot exceed the total actual cost of the district’s electricity usage; any excess credits that exceed the actual cost of the district’s electricity usage will accumulate and can be applied against future energy costs. Because the solar project began prior to Dec. 31 of this year, it will receive “grandfather” status, allowing the district to lock in favorable rates set by New York State law.

How it works

The solar field will produce approximately 3,300,000 Kwh of electricity, which will generate $528,000 worth of energy credits per year (3,300,000 X .16 cents) to cover the school district’s electricity costs.

These credits are enough to offset the district’s actual electricity usage.

Of course, for the next 18 years, the district will still have the approximately $400,000 per year cost of the solar project. However, the combination of reduced energy expenses and state aid will net the district about $300,000 per year:

• $500,000: current yearly school district budget for electricity, which will be offset by
the electricity produced by the new solar field

• $400,000: new yearly cost to district for solar field which will produce all of the
electricity the school district needs

• $100,000: net yearly budgetary savings

• $200,000: per year in state aid

• $300,000: net savings for school district