Millbrook School Is Now 100% Solar-Powered!
Millbrook’s new solar field project is arranged as a Power Purchase Agreement with Solar City. Solar City will own, operate, and maintain the photovoltaic system on Millbrook’s land for twenty years with a solution to finance the system with no money down. In the first year alone, the solar field is projected to lower the school’s annual utility bill by about $35,000. These funds will be allocated to a green revolving fund that will help pay for additional energy efficiency projects that will be a major part of Millbrook’s commitment to carbon neutrality. The solar field will also save the school about a million dollars in electricity costs over twenty years. The school faculty will take full advantage of the educational opportunities and develop ways to involve students in experiential learning projects at the solar field.
The solar field will consist of 5,852 panels, spanning 7 acres of land, and will produce over 2 million kilowatt hours per year. The solar energy harvested by the field will completely cover Millbrook’s current electrical energy needs while simultaneously reducing their greenhouse gas emissions by 35 percent.
The school chose EcoMotion as their solar consultant (Mike Ware of EcoMotion also graciously agreed to be GSA's Solar Expert on our Ask the Experts Section) and carbon mitigation strategist. Prior to committing to solar, the school board also explored bringing natural gas on campus, but the estimated price of the seven-mile line was $5.174 million and prohibitive. So EcoMotion performed energy audits of all 43 buildings on campus, documenting 107 efficiency opportunities with insulation, new windows and doors, lighting, and for geothermal heating systems to replace aging oil-fired boilers. That led to solar system sizing: current consumption equaled approximately 2 million kWh a year, but efficiency would lower consumption.
Millbrook has added a new dorm and has plans to add a new dining hall and maintenance facility, all adding electrical load. Also, in the future, Millbrook will need more electricity for future geothermal, for pumping and circulation, also adding load. These factors were all considered when sizing the system, achieving the of 100% solar-powered goal for now and providing the maximum benefit and carbon reduction for the school.
The Financing Hurdle
Millbrook pays low rates for electricity. While this keeps power bills low, it made the offset value of solar low as well, extending the payback period. With an offset value of 8.6 cents/kWh, it was doubtful they could break even and buy solar through a Power Purchase Agreement at “parity.”
An EcoMotion business associate and Millbrook alumnus, Mark Hopkinson, had an idea. What if they could amass a number of alumni, parents, and other benefactors to invest in solar and to sell the School power at a low rate? They named this the Benefactor Investment Model or the BIM: after a group of benefactors monetizes tax credits and depreciation benefits, reaps net energy metering values, and gets well past the tax recapture period, they could then donate the system to the School leaving it with free power for 20 years. The BIM members would also pick up a charitable contribution value in the process. EcoMotion cleared the model with two New York tax attorneys. Although the BIM model was not used to finance the current PPA, it serves as a potential financing option for future carbon reduction projects.
With the Board’s support, EcoMotion developed a Request for Proposals for a 1.7 MW solar system for Millbrook School. The solar project proposal was released to 12 leading solar providers. EcoMotion managed two job walks, formally responded to questions, and received nine proposals. Each factored in the expectation of a NYSERDA grant of 1.25 million dollars, a generous amount that made PPA financing possible.
At EcoMotion's direction, each of the bids received included a $250,000 interconnection allowance. For every $25,000, the PPA price would adjust up or down by a tenth of a cent accordingly with the hope that interconnection would cost less than its allowance. The winning bid was from SolarCity, with an advantageous PPA price of 7.5 cents for 20 years with a 0% escalator, well below the current energy price.
The Great Power Factor Hurdle
The interconnection study was done after the system was built and although it was going cost $580,000 to interconnect--twice their allowance--the risk was on SolarCity. The study found that the solar system would have a negative effect on the grid. Expensive transformers would be required, and it would raise the PPA price to 8.5 cents/kWh.
The solution proposed by SolarCity’s engineers was to reduce the system’s power factor by adjusting each of the system’s 76 “string inverters.” The resulting loss of the system's output was 5%, but this loss was offset by more efficient panels and onsite equipment.
Every megawatt hour of power produced by a solar project is associated with a renewable energy credit (REC). While these RECs can be monetized by developers and are traditionally held by PPA investors, Millbrook will retain the RECs from this solar project so that the school can apply them to its carbon neutrality goal. Millbrook is very excited to have taken such a large step towards carbon neutrality and looks forward to making more progress through energy efficiency, by adding geothermal systems, and by planting forests at Millbrook, all parts of the next phase of its Climate Action Plan.