A Town Saves Money with Renewable Energy
Tom Lombardo posted on August 11, 2013 |

Scituate is the first town in Massachusetts to power all of its government services using only renewable energy. All municipal services - including water, sewer, municipal buildings, and streetlights - will soon be powered by the sun and the wind. The town expects to save over $400,000 per year in electricity costs and the best part is that they didn’t have to buy the solar panels or wind turbine.

Too good to be true? Here’s the deal. Private investors purchased and installed the equipment on municipal land, so those companies paid for and own the equipment. In exchange, the town agreed to purchase its electrical power from the owners at a rate that’s about 40% lower than what they’d be paying the utility. These agreements are becoming more common in the residential market, as consumers want to lower their electricity costs but can’t afford a large initial investment. This is the first time I’ve heard of a municipality doing it.

First, Use Less Energy

The first step in saving money on energy is not to generate your own, but to use less. Once you make yourself more efficient, then you consider ways to generate power. Several years ago the town of Scituate formed a committee to investigate clean energy. They sent out requests for proposals (RFPs) on energy efficiency and renewable energy production. After an electric load analysis, they found ways to use less electricity by replacing lighting fixtures, transformers, and other electrical equipment with more efficient models. A heating/cooling energy audit determined that they could also save energy through improvements in insulation, replacing oil-burning furnaces with gas-burning furnaces, etc. They invested almost $6M to upgrade this equipment based on the promise of energy savings over the next eighteen years.

Next, Generate Energy

After improving their efficiency, they hired a consulting firm to do a wind site analysis. In addition to taking wind measurements at various locations over a 12-month period, they also considered logistical factors such as proximity to transmission lines. In spring of 2012, a 1.5 megawatt wind turbine was installed. Over its first year, the turbine generated 3.2 million kWh. At an electric rate of $0.143/kWh - the utility rate in that area - that’s almost half a million dollars worth of energy that the town received; they paid less than $300k for that energy.  

Still under construction is a 3 megawatt photovoltaic array, which is being built on a municipal landfill. Again the town sent out RFPs looking for the best company to provide the solar power. They specifically wanted, and found, a company with experience with landfills. With a PV array, you can mount the panels in a fixed (stationary) position or have a single-axis or dual-axis tracking system. A fixed mount is the simplest - no moving parts - but a tracking system generates more electricity because it keeps the array pointed directly at the sun. They decided on a fixed-mount array. If you have enough land, sometimes it’s better to just add more PV panels rather than paying for the more expensive tracking systems that also need to be maintained. Based on local conditions and the array size, the town expects to generate 3.5 million kWh per year from sunlight. That’s pretty close to the numbers for the wind turbine, so I won’t repeat the arithmetic.

Images courtesy of the Town of Scituate

Use the Grid for “Virtual Storage”

Through a net-metering agreement with the utility, any excess energy that the town generates is sold to the grid at retail rates. When demand exceeds generating capacity, they buy power from the grid. In effect, the grid is acting as a free storage medium for excess energy.

Payback Period

The great thing about their agreement is that the town didn’t have to invest in the PV array or the turbine. In that respect, the payback period is one month, i.e. the first utility bill. But they did invest in energy efficiency, so let’s factor that into the equation.

Money spent on energy efficiency: $5.9M

Money saved on electricity costs:  $0.4M per year

Money saved on heating fuel: unknown

Payback period: just under fifteen years, not counting the heating fuel savings.

Not a bad deal!

Don’t Forget about the Kids!

In addition to the cost savings and the “green factor,” the town’s schools will also benefit from this project. The companies that own the wind turbine and PV equipment also produced renewable energy educational materials for use in Scituate’s elementary, middle, and high schools.

Reduce Government Spending and Boost Business

Disregarding the optional purchases to improve energy efficiency, the town of Scituate reduced its electric rate by 40% with virtually no investment on its part. In addition, the projects created jobs, gave a boost to a burgeoning industry, and produced science/technology/engineering/math (STEM) lessons for schools.  Will other municipalities follow suit? I hope so.

Images courtesy of the Town of Scituate

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