Educational institutions across the United States have experienced diminishing budgets and increased operating costs, leaving school administrators and community leaders with difficult choices. In some cases, districts are being forced to close schools. According to the Center on Budget and Policy Priorities, at least 22 states have reduced funding or eliminated certain K-12 education programs as well as early education programs. In addition, approximately 30 states have implemented cuts to public colleges and universities, resulting in layoffs, wage freezes, benefit reductions and increases in tuition up to 15 percent. Students in Rhode Island and New York are now face mid-year tuition hikes as these institutions manage the rising cost of operations and maintenance of their facilities [1]
Private institutions face similar challenges while simultaneously striving to attract prospective students from a shrinking population of those who can afford tuition. The higher cost of tuition, in some cases surpassing $50,000 per year, has shifted enrollment to public institutions. According to the Chronicle of Higher Education, all but the most competitive highly endowed private colleges are beginning to wonder if their enrollments may start to evaporate. [2] In an effort to secure students, some institutions, like Merrimack College near Boston, are freezing their tuition for the first time in decades. Other schools such as Brandeis University and Simmons College have suspended payments to staff retirement accounts.[3] At issue is how both public and private institutions can find solutions to generate revenue as residents, students, and stakeholders are calling on institutions to take a leadership position to reduce their impact on the environment.
The Wind Solution
Wind power is a possible technological solution which can reduce operating expenses allowing administrations to re-direct those savings into salaries, deferred maintenance, and educational programs. Once initial savings are made through the implementation of energy conservation, wind power may be one of the most effective methods to reduce operating expenses and serve as a hedge against increasing energy costs. Wind power is a clean, renewable option to stabilize or reduce energy costs and is currently working at public and private institutions.
A wind project may require one to three years of preliminary research and planning prior to construction. Initially, a feasibility study must be completed to determine whether the project has potential merit and assess the quality of the existing wind resource. The feasibility study analyzes topographical and wind resource data, in conjunction with existing and future energy cost estimates, to determine a project’s preliminary technical and economic merit. With favorable initial results, data collection occurs over a nine to twelve month period, and verifies the consistency of wind speeds at various altitudes across the range of seasons. Once wind data is collected and assessed, the feasibility study evaluates and corrects possible environmental, political and engineering concerns. The study also outlines the necessary permitting and zoning requirements necessary to achieve federal, state and local approvals. The design, engineering, and construction phases of the project are implemented once the feasibility study determines that the project has merit.
Case Studies
The Town of Ipswich, Massachusetts faced between $350,000 to $400,000 in annual electricity costs for its buildings and offices. Saving all or part of these costs would make available funds that could instead be used for additional teacher salaries, school supplies and community programs. Accordingly, a partnership between the Public School and Municipal Light Departments was formed to conceive and implement a wind turbine project that would reduce the economic energy burden on the Town. The designed wind turbine will provide the school system with 37.7% of its electricity needs.
The financial benefits of the project to the Municipal Light Department over 20 years include savings of $500,000 (after paying back a $2.4M loan at 5% interest) and $1.5 Million generated from the sale of Renewable Energy Credits (RECs). The school will realize $2.5 Million in savings over 20 years (including payback of $1.6 Million in zero percent interest Clean Renewable Energy Bonds-CREBs) and $900,000 from the sale of RECs. In addition, the Wind Turbine Project provides educational opportunities for students including a local lab for studying engineering, environmental and physical sciences. “I see this as a tremendous opportunity for the town and schools to really collaborate and cooperate on a common concern – that is energy usage and our reliance on fossil fuels – and what a great way to begin to reduce that reliance,” said Rick Korb, superintendent of schools and a member of the subcommittee working on the turbine project. “It will also be a great educational tool for the kids of Ipswich and the community. It’s really what I like to call a win-wind.”[4]
Adjacent to the High School in Beverly, Massachusetts stands a 100KW solar array (one of eight solar systems created in 1980 as part of President Carter’s Photovoltaic Demonstration Project) and a 10KW wind turbine. After securing a $40,000 grant from the Massachusetts Technology Collaborative (MTC), a feasibility study was conducted over a nine month period to evaluate the design and installation of a large scale Wind Turbine. Ongoing analyses and correspondence with the Federal Aviation Administration (FAA) and the town continue to assess feasible sites for the turbine.
Bristol Community College (BCC), located in Fall River, Massachusetts, is a participant in the Commonwealth’s “Leading By Example” (LBE) program. The LBE program’s goal is to reduce overall energy consumption on state college campuses by 15% by 2012. Part of this strategy involves the use of wind power that will provide the college with clean, renewable energy, reduced electricity costs and improved energy efficiency. Our firm is in the process of conducting wind and economic analysis for the proposed 1.5 megawatt wind turbine that will provide the college with clean, renewable energy, and reduced electricity costs.
The Town of Portsmouth, Rhode Island installed an AAER, 1.5 Megawatt Wind Turbine Generator standing at 336 feet at the high school. The turbine generator supplies much of the electrical power needs of the school and, at times, generates additional electrical power, which is sold to National Grid for 15.4 cents for every kilowatt hour generated. The wind turbine generator is expected to provide over 3 million kWh of power annually and generate a yearly savings of over $100,000. Over the expected 20-year minimum lifetime of the turbine the net savings are projected to be nearly $3 million. According to Finance Director David P. Faucher, the turbine is expected to cover one quarter of its $433,000 electric bill, pay the annual installment on bonds used for its construction — $238,643 — and generate an additional $238,000 in revenue to offset either municipal government or school expenses.[5]
Funding
Grants from the federal and state government are designed to promote the adoption of renewable energy and to offset pre-construction technical support and capital costs. At the federal level, the Clean Renewable Energy Bonds (CREBs) program creates attractive financing options for both borrowers and lenders. A qualified buyer is given access to 0% interest bonds (a formal contract to repay borrowed money at 0% interest for a fixed period) for projects that generate electricity from clean or renewable sources. The lender will receive a tax credit from the Federal Government instead of an interest check from the borrower. In addition, Treasury Department grants are now available in lieu of tax credits with wind projects eligible to receive grant funding for up to 30% of the basis for a property’s value.
At the state level, funding mechanisms vary. For example, Massachusetts funding is available for public facilities that are customers of investor-owned electric distribution utilities or Municipal Light Plant Departments that pay into the Renewable Energy Trust. The Community Wind program provides financial and technical support to wind projects through three different stages of development: 1) services for high level site screening (public projects only), 2) grant support for in-depth technical and economic feasibility analysis, and 3) grants for design and construction support. Under these programs, wind projects starting at 100 Kilowatt (KW), up to and beyond 600KW, are eligible to receive from $30,000 for a basic feasibility study and up to $85,000 for a feasibility study that includes the installation and operation of a meteorological tower to collect on site wind data. For design and construction, public entities are eligible for a zero cost share incurred below the maximum funding level while private organizations are responsible for 25% of the cost share. Funds available for systems starting at 100KW, up to and beyond 600KW, range from $225,000 to $600,000.[6]
Iowa, which generates the second largest amount of US wind power, through its Iowa Energy Bank, provides loans and alternative financing options repaid by the energy savings resulting from energy improvement projects. Financing is available via a pre-arranged, low-interest capital loan note or lease purchase-agreement with a local or regional investment bank. To date, most of Iowa’s school districts have participated, as have dozens of hospitals and private colleges. Likewise, California provides assistance through the Self Generation Incentive Program and offers incentives to customers who produce electricity with wind turbines with incentive payments ranging from $1/Watt (W) – $4.50/W. Projects that utilize systems manufactured in California are eligible for an additional incentive worth 20% of the base incentive. For feasibility studies, the California Energy Commission will provide up to $26 million in loans to schools, hospitals, and local governments for the installation of energy-saving measures and studies. [7]
In conclusion
In this challenging financial period, organizations must adapt to preserve the quality of education through teacher’s positions and material resources in a shifting tide of fiscal and environmental policy. Educators are considering wind power as a solution for many of the economic and environmental challenges they currently face. In addition to being a renewable source of energy, wind power presents a new form of economic development, tangible environmental responsibility and long-term educational benefit to the communities that embrace the opportunity.
[1]Koulish, Jeremy, Johnson, Nicholas, & Oliff, Phil. (2009). An Update on State Budget Cuts
At Least 36 States Have Imposed Cuts That Hurt Vulnerable Residents, But the Federal Economic Recovery Package Is Reducing
the Harm. Center of Budget and Monetary Policy. http://www.cbpp.org/cms/index.cfm?fa=view&id=1214
[2] Cronin, J., & Horton, H. (2009). Will Higher Education Be the Next Bubble to Burst? The Chronicle of Higher Education. http://chronicle.com/free/v55/i37/37a05601.htm
[3] Lewin, Tamar. (2009, May 21). Brandies Halts Retirement Payments. The New York Times Online.
[4] Rattigan, David.(2008,March 2). Ipswich wind turbine plan will go before voters. The Boston Globe Onine.
[5] State Wind Power Opportunities.(2009).Retrieved June 3, 2009, from
http://www.energycurrent.com/index.php?id=3&storyid=18040
[6] Commonwealth Wind Incentive Program. (2009). Retrieved June 4, 2009 from
http://www.masstech.org/renewableenergy/commonwealth_wind/community_scale.html
[7] California: Incentives/Policies for Renewables & Efficiency.(2009). Retrieved June 4, 2009. from http://www.dsireusa.org/incentives/index.cfm?re=1&ee=1&spv=0&st=0&srp=1&state=CA
