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Schools Provide Financial Platform for Investing in Solar Power

Since the early 1990s, schools across the nation have been installing solar roofs for educational, financial and environmental rewards, making them community platforms for clean energy technology.

In 2003, the San Diego Unified School District announced the largest photovoltaic initiative out of any school district in the United States. Since then, many have followed suit, including the Poway Unified School District, whose new Monterey Ridge Elementary School (which opened this school year), has more than 20,000 square feet of large black solar panels. The panels will provide up to 60 percent of the school’s energy needs. Further up north, the Los Angeles Community College District has vowed to transform its nine colleges into energy-efficient, sustainable campuses.

“I’d like to think we help forged the way into those initiatives,” said J. William Naish, energy utility management section coordinator for San Diego Unified.

The way the SDUSD financed its solar project has also caused a buzz in the industry. By bringing in a third-party financier, the district pays no upfront costs for the installation of the solar roofs. Instead, the district leases the solar panels for $1 and pays a monthly energy bill on a fixed rate to the financier, which in the SDUSD’s case is GE Energy Financial Services, a unit of General Electric Co.

“There’s an enormous growth in this type of structured financing for solar projects,” said Randall MacEwen, president and chief executive officer of Los Angeles-based Solar Integrated Technologies Inc., which led the SDUSD’s solar project.

“Basically, you move the cost for the end user so instead of having a large upfront capital cost, they have an annual operating cost put into their budget. Structured financing allows us to access that customer base that wants a solar system but doesn’t have the resources or the ability to take advantage of the tax attributes.”

MacEwen pointed out similar structured financing deals have been very successful in the wind-producing energy market. However, the returns in that market have gotten a little tighter and now investors, financiers and corporations are turning to solar as the next growth area in clean energy.

According to Clean Edge, a clean-tech marketing research organization, the global market for photovoltaics will grow from $7.2 billion in 2004 to $39.2 billion by 2014. Venture investments in clean energy, including photovoltaics, nearly tripled last year to more than $2.4 billion.

MacEwen said as the market grows, investors will put more pressure on companies to adopt clean energy initiatives, such as solar roofs.

“You’re seeing a lot of investors wanting to better understand the carbon footprint of the companies they are investing in,” he said. “So companies have to look at green solutions. Investors are looking at long-term investments and they want to make sure the companies they invest in aren’t negatively impacted financially because they haven’t taken actions to reduce their greenhouse gas emissions.

“As a result, we are seeing a record level of interest in corporate America in green solutions like photovoltaics.”


Andrea Siedsma is a freelance writer for the San Diego Business Journal.

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