Making energy costs more predictable, and many other benefits too

Massachusetts has introduced an initiative to make it easier for towns to install photo voltaic solar panels on municipal buildings, through an innovative third party financing program.

Through public private partnership, market incentives, and leveraging state and federal tax rebates through third party installers, towns like Hopkinton, MA, can now install solar panels on the roofs of schools and other public buildings with no up front costs. The Third Party Financing arrangement replaces expected energy payments to utilities with payments to the private third party who finances and installs the solar panels on the public building. After a period defined in the contract, the town owns the equipment outright and any energy produced from it.

Total available funding

From the CommonWealth Solar web page: "Starting in 2008, Commonwealth Solar has $68 million available for funding over the next four years to support PV installations in Massachusetts. The effort combines $40 million from the Renewable Energy Trust (Trust) and $28 million from the Alternative Compliance Payment funds that the Massachusetts Division of Energy Resources has collected under the state’s Renewable Portfolio Standard program. The state estimates that Commonwealth Solar will result in 27 megawatts (MW) of PV projects over the next four years."

Why is the state doing this?

The Governor recently signed the "Green Communities Act" which includes aggressive targets for alternative energy adoption in Massachusetts. To achieve these environmental targets, the states has worked to develop innovative programs. Energy providers and delivery companies like NStar are also enthusiastically supporting the Green Communities Act because they believe it will enable stabilization of energy rates as well as new business opportunities.

How can Hopkinton benefit?

Hopkinton's participation in this program - by partnering with a private third party company who has the expertise on financing, installation and maintenance - can provide several benefits:

• Predictable energy costs, a large cost item for the town, over an extended future period of expected energy price volatility
• Enhance the science curriculum of the schools, through real-time classroom access to energy production and consumption data and other curriculum enhancements included in the program
  
• Return additional money to homeowners who pursue solar.
• Reduce the amount of pollution created by producing a portion of energy used from solar instead of traditional energy sources
• Social and reputational benefits to our community as a leader in environmental sustainability
  

Why not do it?

There are reasons not to do it too, but these are difficult to defend:

• We've never done this before
• What if price of traditional energy come down drastically in the future?
• Let's wait and see
  

Is Hopkinton considering this?

Hopkiton's Town Manager and Facilities Director have been investigating options, have inquired with several potential third party companies, and have signed a letter of intent that allows us to move forward to negotiate the best possible terms for an agreement under Massachusetts's Commonwealth Solar program. Their diligent work could reap Hopkinton additional financial benefits by enabling us to get started soon enough to design a contract that captures federal tax incentives due to expire at the end of 2008.