Hybrid Use Of Fund Balance Could Cover Costs Of Solar Roof At NMS

By John Voket

An idea for a solar panel installation at Newtown Middle School that could generate enough daily electricity to power the equivalent of ten homes was initially shelved during budget deliberations, but it may see the light of day after all.

Newtown Energy Commission Chairman Dan Holmes is working with Finance Director Robert Tait and First Selectman Pat Llodra on a plan that could shift the end costs for the photovoltaic panels and related hardware away from the Capital Improvement Plan. Mr Tait told The Bee this week he is crafting a hybrid process that could tap the municipal fund balance up front, with substantial repayment coming from committed grants, with energy savings repaying the balance within the same 20-year window as bonding.

“We’re really in the first phase of exploring this, but I think it could work as long as we can secure grant commitments to cover what we would use from the fund balance,” Mr Tait said. “It’s also contingent on the school district’s agreement to repay any outstanding amount from savings.”

Mr Tait explained that the repayment for any outstanding balance owed back to the municipal fund for the cost of the solar roof can be achieved by the school district simply budgeting what it would have paid to purchase 100 percent of the power generation and delivery from a supplier, and then earmarking the annual difference in savings achieved through the school’s own power generation to repay the fund.

Mr Holmes said he was excited to learn last week that an engineering study contracted by the architects for the middle school roof replacement determined the overall cost to supply and install a 20 kilowatt hour solar system was markedly less than what he presented to the Board of Selectmen during budget deliberations on January 24.

At that meeting Mr Holmes and fellow commissioner Desiree Galassi appealed for a number of initiatives, including solar panels for the middle school to help cut energy costs. Other ideas included a pellet boiler systems for some school buildings, feasibility studies, and seed money to enhance the town’s ability to attract grants by providing matching funds for proposed projects.

But since most of the commission’s proposals involved initiatives that rise to or above the criteria for the Capital Improvement Plan, Mrs Llodra suggested at the time that the Energy Commission begin working with a modest operating budget of $5,000, crafting their capital project proposals for consideration in the next round of CIP deliberations.

“You are doing the government’s work when you do some of this outreach,” Mrs Llodra said. “[But] most of your work is capital projects.”

But as the middle school roof project moved closer to launch, Mr Holmes received an engineering study from Consulting Engineering Services of Middletown that showed that the initial out-of-pocket cost for the turnkey solar power system would be just over $600,000 after a state school reimbursement. Estimated savings calculated on average to peak electrical generation would further offset the balance by about $125,000, according to the study.

This would leave the town, district, or the Energy Commission to cover approximately $475,000 from additional grants, fundraising, or other revenue sources.

State Grants Available

The study referenced school reimbursement programs available through the Connecticut Clean Energy Fund (CCEF). Through a portfolio of initiatives, the CCEF seeks to accelerate the design, construction, and operation of high-performance schools in Connecticut, according to the agency’s website.

A high-performance school improves the learning environment while saving energy, resources, and money, according to CCEF. The key attributes of a high-performance school are healthy indoor air quality; thermal, visual, and acoustic comfort; and efficient use of energy, materials and water, which can include the installation of clean energy systems.

Highlights of the CCEF’s program include:

*Assistance at the earliest stages of a municipality’s consideration of a major renovation or new school construction project. The CCEF has retained the Institute of Sustainable Energy at Eastern Connecticut State University to provide information about the benefits of high-performance schools and financial incentives that may be available.

*Provision of an energy engineering firm or firms that will provide technical consulting services to municipalities.

*Provision of financial assistance to reduce the capital costs of clean energy systems, Connecticut Department of Education construction reimbursement grants, and other incentive programs.

*Coordination with the Connecticut Energy Efficiency Fund’s “Energy Conscious Blueprint” program

ARRA Funding Possible

Another possible avenue of revenue is through the American Recovery and Reinvestment Act Commercial Solar PV Program, which solicits applications from eligible entities working with experienced renewable energy developers. The CCEF says applications will be accepted until funding is exhausted.

The intent of the funding is to enable owners of solar PV systems to “break even” over the life of the equipment, with a fair and reasonable return on investment compared to purchasing the equivalent amount of power from an electric utility company.

A recent study by the Institute for Sustainable Energy of Eastern Connecticut State University highlighted the inefficient use of energy by Connecticut public schools. The institute found that the performance of Connecticut schools falls well below that of schools nationwide, with 80 percent scoring below the national average.

This means that Connecticut schools use significantly more energy than comparable schools elsewhere. In fact, 59.2 percent of Connecticut’s schools performed in the bottom 25 percent nationally.

Mr Tait said that if the Newtown plan is achieved, a special Sustainable Energy Project Fund would be created. Then at the end of each fiscal year, the difference in savings between what the school district budgets for conventional electrical costs for the middle school and what is self-generated would slowly replenish the fund balance.

At the point when the earmarked energy savings fully repay the fund balance, school district budgeting for electrical costs at the middle school would revert to the actual amount after self-generation savings are applied, Mr Tait said.

“That way once the system is paid for, the actual middle school electrical line would be reduced by the amount saved every year going forward,” Mr Tait said. Based on his review of the engineering study, at peak performance the system could fully pay for itself as soon as 15 years after the solar panels go on line.

Mrs Llodra said she was happy to see “the kind of out of the box thinking Mr Tait is applying to try and achieve this energy saving project for the school district and the town, without creating any further challenges to meeting current requests for capital project funding.”