Ithaca College (student pop. 6,700), located in the Finger Lakes region of central New York State, has been listed in the Princeton Review’s list of top green colleges for six straight years. Now, it is getting even greener, with the addition of 2.9 MW of solar energy. Ithaca College recently signed a 25-year power purchase agreement (PPA) for this project. The electricity will come from more than 9,000 solar panels being installed in Seneca, about 40 miles from the campus, and will generate an estimated 3.55 million kilowatt-hours of electricity in the first year of operation, powering 10 percent of the college’s load.
Striving Toward Carbon Neutrality
Ithaca College developed a Climate Action Plan in 2009, which called for 100 percent carbon neutrality by 2050. The first five years of the Climate Action Plan focused on campus energy efficiency. The college submetered the majority of its buildings to help improve energy efficiency across the campus, constructed two buildings in 2011 that achieved a LEED platinum rating, and the Athletics and Events Center was certified LEED gold. In the first three years after adoption of the Climate Action Plan, the college decreased the amount of electricity it purchased by almost 50 percent.
The plan for the first five years also included evaluating options for third-party financing of renewable energy projects. Meanwhile, Governor Cuomo launched the $1 billion NY-Sun initiative to help New York reach its goal of 50 percent renewable-generated electricity by 2030. The New York State Energy Research and Development Authority (NYSERDA) offered grants through the NY-Sun Initiative, and awarded OneEnergy Renewables a $1.6 million grant to develop a large solar project. “Once we secured the grant, we decided this project site would be a great fit for a local institution like Ithaca College,” says Travis Bryan, COO of OneEnergy Renewables.
A PPA is often more ideal for a college or university than other options such as green pricing programs or renewable energy credits (RECs). Utility-offered green pricing programs usually come at a premium, meaning the university is spending more money per MWh. And REC-only deals are losing popularity in favor of PPAs, which can offer RECs bundled with actual green power, helping to meet sustainability goals while reducing costs and getting more renewable energy capacity built and added to the U.S. grid.
“With a long-term PPA connected to a renewable energy project, a university can walk the talk with a long-term commitment more effectively than it can with most other options to meet climate or sustainability goals,” says Bryan. The Ithaca College PPA will offset an estimated 888 metric tons of carbon dioxide equivalent each year. “This solar power purchase agreement will reduce the college’s greenhouse gas emissions by three percent compared to the baseline year of 2007, completing one of the objectives listed in the Climate Action Plan,” Gerald Hector, Ithaca College vice president for finance and administration, stated in the press release about the project.
Long-term fixed-price contracts like PPAs also offer a hedge against retail electricity price increases and price volatility. The installation is estimated to shave $10,000 to $50,000 off the school’s electricity bill annually, depending on the future price of electricity. “It’s exciting when an institution that has long-range climate commitments can find a solution that saves money at the same time,” says Bryan. “The conversation about renewable energy purchasing is increasingly starting in the financial office of commercial and other institutional customers instead of the sustainability office.”
Opening Up the Market Through Remote Net Metering
Another reason the Seneca, New York, site was a perfect fit for Ithaca College was due to the opportunity to do remote net metering. In 2011, New York joined a handful of other states that support remote or virtual net metering, allowing customers to purchase power from an off-site source and receive credit through their utility bill. “Remote net metering really opened up the market for many more customers,” says Bryan. “This works wonderfully for colleges like Ithaca that either may not have or may not wish to use the land on campus for a large solar array. Even though the project is off-site, it’s as if it’s generating inside the college’s electricity meter.” According to RMI Senior Associate Anthony Teixeira, “Remote net metering is a sort of hybrid, capturing some of the benefits of both larger off-site deals and smaller rooftop solar. In states that offer this option, large buyers of electricity have access to a more complete spectrum of options.”
Borrego Solar Systems is building the project, which is expected to come online this summer. Greenwood Energy is providing project financing (the NYSERDA grant covers about 25 percent of the cost to develop the project), and will own and operate the solar array.
OneEnergy Renewables is a founding sponsor of RMI’s Business Renewables Center (BRC), which accelerates corporate purchasing of renewables. The BRC to date has worked most intensely with major corporations, but the lessons learned and the opportunity present in large-scale renewable energy PPAs are applicable to others as well, including universities and colleges. “While the BRC has traditionally focused on corporations, it’s great to see that our developers are looking at other market segments as well,” says Teixeira. “More potential buyers mean more demand, which will allow for more projects to get built.” Bryan adds, “BRC has really helped to demystify the space. It took something that was previously seen as a complicated transaction, only possible for big companies like Apple and Google, and helped to simplify and explain the process, bringing renewable energy PPAs to a much larger market.”
Ithaca College is just one of many universities that are signing renewable energy PPAs. According to the Green Gigawatt Partnership, higher education institutions are purchasing over 570 MW of renewable energy through PPAs. “Universities are signing some innovative deals, too,” says Teixeira. “For example, George Washington University, American University, and George Washington University Hospital signed a deal together with Duke Energy Renewables that was notable for being a multi-buyer, single-seller contract. We’ve seen very few of those in the market.” OneEnergy Renewables has been working on these types of deals—non-utility purchasing of renewables—for nearly five years, including with Johns Hopkins Medicine and the National Aquarium. According to Bryan, “We will see a lot more of these types of deals and announcements coming. The floodgates are opening.”
This article was originally published on the Rocky Mountain Institute blog, RMIOutlet. Republished here with permission