Published on December 6th, 2010 | by Mridul Chadha1
Bailout Money to Finance America’s Largest School District Solar Power System
December 6th, 2010 by Mridul Chadha
Mount Diablo Unified School District has awarded a 30-year contract to SunPower to execute America’s largest school district solar power system. SunPower is responsible for the design, installation and maintenance of the solar power systems which will staggered across 51 schools in the district.
The power system, with a capacity of 11.2 MW, will potentially save $192 million over its 30-year contract period. The power system will be installed on the rooftops of school buildings, parking lots and in hard court areas. The power system will be financed through the Clean Renewable Energy Bonds (CREBs) available under the American Recovery and Reinvestment Act of 2009. The cost of the bonds will be shared by the federal government and the district authorities.
Similar projects are being executed throughout the United States. Butte College in Northern California will save an estimated $150 million over 30 years once its 4.5 MW solar power system becomes operational next year. The University of Delaware is also planning to install roof-top solar power systems which are likely to generate annual savings of $30,000.
Moving towards decentralization is the perfect solution for not only for our environmental problems but economic problems as well. According to Environment Protection Agency, the average emission rates from coal-fired power generation are: 2,249 lbs/MWh (1020 kg/MWh) of carbon dioxide, 13 lbs/MWh (5.9 kg/MWh) of sulfur dioxide, and 6 lbs/MWh (2.7 kg/MWh) of nitrogen oxides. Switching to decentralized power generation, therefore, prevents emission of these hazardous pollutants.
Economically this type of projects make sense because we are investing in better infrastructure. Coal-fired power plants (and others based on conventional fuel technologies) will be first to face taxes or penalties once some kind of national carbon emission reduction legislation is passed. It would not be long before the United States becomes a party to an international agreement to comprehensively reduce carbon emissions.
Additionally, with the up-gradation of the aging transmission infrastructure and the need to expand it to connect the large-scale renewable energy power plants would mean at least a slight increase in the electricity bills. So the grid electricity is not going to become any cheaper in the near future.
While the initial capital investment will be high, the savings generated over the operational period of the project are extremely attractive. The cost of the project and the payments to be made to SunPower can be easily extracted from the $192 million savings.
One of the models following this principles is being followed in India by the energy efficiency contractors. These companies are contracted to execute projects to improve the energy efficiency of a system, machine or a building. The entire project cost is borne by the company and customer pays the company after a period of one year once the substantial savings have been generated. The company is paid a portion of these savings every year. Once the payment period has been completed, all the savings go to the customer.
It is heartening to see the federal government supporting such projects. These projects should be encouraged more and should not be considered only on the basis of initial capital cost, the savings and the environmental & health costs related to conventional power generation technologies must also be considered.
Image: Waynenf at Flickr (Creative Commons)