Arizona Utilities Offer Solar Power to Schools
Many schools have an interesting dilemma. The federal government offers a 30-percent tax credit for renewable energy systems but schools do not pay federal taxes. Unless a school is in a state or municipality with generous rebates that do include educational institutions, solar power can be cost-prohibitive, especially in an economic climate seeing vast reductions in school funding from states.
Arizona's two largest utilities are each offering solutions to help schools, which almost always have loads of roof space available for solar panels.
Arizona Public Service (APS) has asked state regulators to approve a plan to spend $5.6 million annually to help schools install solar power systems, thus saving the schools energy and helping the utility broaden its renewable energy portfolio. APS also wants to spend $1.6 million a year doing the same for government buildings. The Arizona Corporation Commission is still reviewing the APS proposal.
Salt River Project (SRP), however, is opting for a different approach. Instead of installing solar panels on a school's rooftop or grounds, the utility is offering schools in the state a different solution: power purchase agreement, or PPAs. Under this scenario, the school would pay no money up front -- a blessing when cuts have become the budgetary norm -- but instead buy solar energy from a remote power plant with the utility as broker (and likely owner of said power plant as well).
More specific to the SRP plan, the utility would sell electricity from a solar power plant to be built in Pinal County, AZ in 2011. It would offer the solar electricity to schools at a fixed rate of 9.9 cents per kilowatt-hour for 10 years.
The plan would save SRP money because it is cheaper to build one central power plant than to install smaller solar systems on multiple rooftops. The schools are aided by low upfront costs, locking in a fixed rate for electricity and switching to green power.
To start, however, the schools would be paying a premium for the solar power, as the current price they pay during the day for grid electricity is 8.3 cents/kWh. That's a 19-percent increase in electricity costs during the day when school is in session and electricity demand is at its peak.
Yet, SRP points out that this is at today's prices. Over the next decade, electricity prices are expected to inflate considerably and the utility argues that by the end, participating schools would be saving money.
Via The Arizona Republic
Photo Credit: EcoGeneration
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