03 November 2010
The adoption of a more robust feed-in tariff (FiT) program in California has been a hot topic in recent news. FiT proponents argue that such a program would help push California toward energy independence, increase private sector investment in renewable technologies and encourage its deployment by homeowners and businesses across the state.
In addition to these benefits, a FiT program could also put much needed financial resources back into the hands of some of our most strapped academic institutions.
FiTs are policies designed to make renewable energy cost-competitive with traditional coal-generated electricity. Typically, these programs require electric utilities to provide payment or credit to FiT participants that produce “green” electricity from a renewable source and feed it back to the electric grid. California school districts that install renewable energy systems on their building rooftops or parking lots could profit from the sale of excess energy they produce. Revenue generated from the sale of green electricity could be used for textbooks, teachers and other important resources– an attractive offer given the tough decisions schools have made recently to adjust to budget cuts, delayed funding and other financial challenges. This revenue could also be applied to the cost of the district’s renewable energy installation to pay it off more quickly provided the value of FiT payments received by the district are higher than the debt or energy purchase price on the solar installation. A FiT program would also allow school districts to host larger systems at each school site, reducing the cost per Watt of solar to the district and further increasing the benefits of solar.
In addition to their general interest in renewable energy, schools are also prime locations for renewable energy installations as they have the appropriate space or facility resources. Large flat building rooftops across multiple campuses and school parking lots and other structures make excellent locations for solar. Innovative finance structures such as power purchase agreements and Build America Bonds combined with updated utility rate structures that favor renewable energy have also made solar a more affordable and financially prudent strategy for schools.
More information on the debate over a feed-in tariff program in California can be read in the Los Angeles Times and the Solar Home and Business Journal Online.
About The Author
Dustin Keele is Co-Founder and Executive Vice President, Photon Energy Services, a company that provides the financial technology for deploying cost-effective renewable energy power plants. As a member of the SolarTech Finance Committee, which is comprised of top financial, legal and solar experts, Dustin collaborates with PV systems developers and financing agencies to develop innovative financial technologies to make solar a more affordable and attractive energy solution for individuals and organizations nationwide.