A Powerful Proposition

PPAs making solar power affordable to nonprofits

If you live in New Hampshire or Vermont, you’ve seen solar power on the horizon. In fact you’ve probably driven by stretches of road where the sun glints off rooftop solar panels or you’ve marveled at sheep cropping at vegetation among the arrays.

And, as part of your school board, your church, your town--you might love to get involved with solar power--but it all seems a bit complicated and overwhelming.

You wonder:

  • What are the start-up costs?
  • What are the maintenance fees?
  • What are the long-term savings?
  • Who’s going to shovel the snow off the panels on the roof during our cold New England winters?

You’re not alone.

Let’s get that last question out of the way.

“We don't recommend people shovel off their array,” says Jim Merriam, CEO or Norwich Solar Technologies (no stranger to snow or solar power.) “It’s totally fine. It's built into the calculations that sometimes there will be snow on the array.” Norwich Solar Technologies specializes in commercial solar and community solar installations in Vermont and New Hampshire.

The other answers also come as pleasant surprises.

Most nonprofits can’t take direct advantage of the big tax credit that comes from solar power . But in that case, there is a Power Purchase Agreement (PPA) in New Hampshire, or an Solar Services Agreement in Vermont (similar, but with a twist).

“We have this other type of solution that would require no money out of pocket for you. That can still give you savings; you're definitely not going to be able to get the tax credit because you don't own the system in the PPA, but we can get you the savings. And if you're a nonprofit, the great news is we can set you up such that somebody who can take the tax savings can take them and then pass them along to you as part of your discount,” says Merriam.

To review:

  • You can get your power cheaper.
  • You can feel good about being responsible for getting power from a clean, renewable energy source.
  • There's no financial obligation to you in terms of money up front.
  • The only thing you are committing to is typically somewhere between 20 and 25 years you're going to buy power at a discount.

For nonprofits, “It's in their financial best interest to go to PPA,” says Merriam. “Then often most of the time, there's a buyout provision, so after six years they can buy it. By that point in time it's depreciated. It's still got some life left in it, and they can get it at fair market value.”

You know solar is definitely a feel-good energy source, but who else that you know locally has gone and put their trust in PPA arrays?

Merriam will happily reel off this partial list of nonprofits either fully solar or in the permitting process:

Also: Don’t worry if the roof of your town hall, parish house or elementary school isn’t solar panel perfect.

“A lot of times you think of the school property as the perfect place to put the array, and it often doesn't work out that that's necessarily the case. So a lot of times, the array is located off site, where we either own or lease the land for someone or we'll put the array there for the school.”

If you really think about it, schools are wonderful spots to use solar. “They're obviously going to be around for 25 years, and signing up for 25 years energy savings is not a bad proposition,” says Merriam.

So, you’ve been reading up on solar, and seeing places you admire, such as the Dartmouth-Hitchcock Medical Center in Lebanon have gone the PPA route. How can you help your nonprofit make the green leap?

It’s often someone with a passion for a better way--and a desire for the least cost to the pocketbook and the environment--who drives the process.

According to Norwich Solar Technologies, they’re usually approached by a board member, or a school superintendent or principal.

Merriam says, “Sometimes a motivated community member, who has really tried to drive their school to become sustainable,” will reach out. “A lot of times we don't really see until we're well into the project that it has been driven on a grassroots level ... and the same with towns as well, a local gadfly who is really pro solar, renewable energy pushes that.”

In New Hampshire and Vermont, Norwich Solar Technologies finds that folks are often on the same wavelength. “They believe in renewable power and solar energy and green living.”

If you live in Vermont, you are likely familiar with energy committees. Steve Snyder, marketing director for Norwich Solar Technologies, describes them as, “A group of really dedicated people for whom it is almost a part-time job, trying to advance the town's energy planning and just really trying to learn and get as much information as they can to help their local community.”

Outreach is key to spreading the word about PPAs. Norwich Solar Technologies President Joel Stettenheim has a robust Powerpoint presentation he gives to energy committees. The company presents at tradeshows, and the up-to-date website has information about past and present projects.

“We may have an event to highlight a local array or series of arrays and invite the energy committee and again, the hunger is there, and the passion is there on their side to get something to go,” says Merriam.

One thing you might not want to do when beefing up on your PPA knowledge, is to equate the agreement to leasing a car.

“Each person comes at this from their own perspective, I find leasing a car financially fraught sometimes, that's not the case with a PPA. And a lot of times you have to put money down on a car lease, there's really no money to spend on a PPA for the owner,” says Merriam.

“There's no equivalent of if you drive more than 12,000 miles. There's no deposit down, there are no hidden fees. You're not required to buy it after three years. The tax credit really makes the proposition work such that it's a mutually beneficial relationship between the owner and the offtaker (energy user). If there was no advantage to the owner, you would see more hidden costs buried in these. But because they both need each other to exist, and they both are being able to benefit, beyond the individual transactional benefit there's a benefit societally. It's cliche, but it’s truly a win-win.”

Regarding maintenance, there’s a lot less for solar than your car.

“The beauty of solar is that there's no moving parts and it's a very reliable energy source so, again, different than a car where you need to change your oil, put your snow tires on, you can basically--I don't want to say ‘set it and forget it’--but it's generally producing power, you might need to mow it probably once a year if it's a ground mount, if it's a roof mount you don't.”

Not that solar is entirely maintenance free.

“Sometimes in year 12-15 the inverter device that converts the DC energy off the solar panels and puts it onto the grid is replaced and that's always factored into the calculations. That's really the big maintenance item,” says Merriam.

The option to buy in year six, is key. “At that point (the equipment) is significantly lower in price from a fair market value perspective.” And the fair market value is calculated by an independent assessor.

If you’re someone who doesn’t like surprises, or if you like being able to plan well into the future, a PPA might be for you.

“The other beauty of a PPA besides saving nonprofits a certain percentage off their bill, it also introduces price predictability to them. They can know three years out, ‘my energy costs are going to be x.’ If you think about the volatility you see in gasoline or diesel prices and fuel prices, particularly in schools or towns, then you know this is a great assurance.”

But, lastly, you wonder about committing to 25 years of solar. That’s a long time--what if the cost of using--say--natural gas plummets?

“A good predictor is if you go to the U.S. Energy Information Administration site, their whole existence is to predict energy prices into the future,” says Merriam. “Natural gas has definitely helped to keep rates low in Vermont, New Hampshire and New England, but I don't think we're going to see natural gas prices plummet at this point.”

Contact Norwich Solar Technologies Today for a Free Site Evaluation! (802) 281-3213 | sales@norwichsolar.com