By Catherine Tsai
Denver (AP) — The Upper Scioto Valley School District in Ohio, battered by a slowdown at a nearby Ford Motor Co. plant, wanted to explore alternative energy when planning to fix its budget and create jobs.
The district had a square mile of land on which it could put wind turbines and tap some of the best wind resources in the state. It just needed the money.
That’s where Boulder, Colo.-based NexGen Energy Partners came in.
NexGen builds and maintains on-site wind and solar systems for customers, sparing them construction and maintenance costs. Using renewable energy grants and credits to defray costs, the company makes money selling power to customers over long-term contracts.
NexGen erected two, 100-kilowatt turbines for Upper Scioto Valley schools, which paid $35,000 for some of the power and an engineering fee, Assistant Superintendent Jim Bowser said. The district projects the turbines will save it about $1.7 million in 15 years on utility bills.
“Are we breaking even? You bet,” Bowser said.
The district wants to add more turbines and a solar power system. It also could turn biomass into energy with other corporate partners.
Having someone else build a renewable energy system and buying just the power is becoming more common for nonprofit groups, businesses and local governments. The model makes the most sense when customers own the properties, pay high utility rates for conventional power, and when projects can qualify for incentives or tax credits.
Schools and other government entities don’t qualify for tax credits, but 14 states let third parties that aren’t a regulated utility sell power, according to the Database of State Incentives for Renewable Energy.
“It’s the only way government incentives can effectively be used,” said MP2 Capital CEO Mark Lerdal. The San Francisco-based solar project developer has a power purchase agreement with the city-owned Denver International Airport, where MP2 owns and operates a new solar power system.
There are other options for minimizing costs. Eighteen states allow loan programs in which homeowners or businesses pay off a solar project over time through a special assessment on property, according to DSIRE.
The key for NexGen is finding projects it can build on site, with no need for complex transmission systems to deliver power.
“If we can deliver energy on site, whether it’s a school, college or small town, all that infrastructure is already in place,î said NexGen President John Brown, formerly of the National Renewable Energy Laboratory in Golden, Colo. We just have to bring in the actual equipment.”
For years, Eldorado Artesian Springs Inc. in Louisville, Colo., wanted to add renewable energy, but paying about $400,000 to install solar panels was never an option, Chief Financial Officer Cathy Shoenfeld said.
NexGen has provided Eldorado with solar panels that should generate close to half of the bottled water company’s electricity needs. Under a multiyear contract, NexGen will sell the power to the company at rates comparable to what the utility Xcel Energy charges.
“It’s not going to cost us any more than what we would pay for power from Xcel,” Shoenfeld said. “In a situation like this, there’s really not a lot of risk.”