HCC solar deal

An addition to Susquehanna Center at Harford Community College, shown under construction in April, is one of four buildings that could get solar panels under a complex energy hedge deal the college's board discussed Tuesday and could approve as early as next week. (Nicole Munchel | Aegis staff, Patuxent Homestead / April 25, 2012)

Harford Community College could soon have solar panels installed on the roofs of several buildings, saving the college big bucks in utility bills and at little or no cost to the college itself.

The college's Board of Trustees met during a special work session Tuesday morning to discuss a possible partnership with Tecta Solar to sell the energy generated from the solar panels to a third party, who would in turn give HCC a discount on their power.

The innovative proposal could win final approval as early as a special Board of Trustees meeting planned for this coming Monday, July 23, at 6 p.m. in the Chesapeake Center board room.

HCC President Dennis Golladay explained to board members and staff Tuesday that time is of the essence in approving the deal.


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"We didn't expect to come up with anything to bring to the board during the summer," Golladay said. "We got such a good price and such a good deal [that it is] important for the board to take a look at it now."

If discussions waited until August, during the next scheduled board meeting, Golladay continued, "the agreement would have been in line to save HCC over $900,000 over 20 years in energy costs."

If the panels and energy system are installed before the end of December, however, Golladay said there could be an additional energy savings of $120,000 because of tax credits involved that may expire at the end of the year.

"From my standpoint, it looks like a tremendously good deal for the college," he said.

Rick Johnson, HCC vice president of finance and operations, called the proposal a "very good opportunity."

Johnson said he refers to the project as an "energy hedge, because we're actually hedging the price for 20 years."

When looking at proposals for solar energy, Victor Dodson, HCC director of procurement, said, "What we got back from the market was beyond our expectations."

Golladay said former HCC finance chief John Cox and his staff worked on a possible power purchase agreement involving solar energy panels before Cox left HCC earlier this summer to become president of Cape Cod Community College in Massachusetts.

The panels would be installed on four buildings on campus that have new or relatively new flat roofs: Joppa Hall, Chesapeake Center, Student Center and the addition to Susquehanna Center currently under construction.

Board member John Haggerty brought up that the college had planned to do something similar to Joppa Hall in 2009, but that project never came to fruition.

"We were not as prepared then as we are today," Dodson replied.

Golladay stressed that the project would need "no capital investment on the part of the college. We don't pay for the solar panels."

Halfway through the meeting, representatives from Tecta joined the group to answer any questions the board had.

At the end of the 20-year lease, could the college buy the panels or renew the contract, Haggerty asked.

Robert Rabe, vice president of business development for Tecta, said the college would have both of those options, though the contract would most likely be in five-year increments.

At the end of the original contract, he added, there may be new technology and Tecta "might be able to swap [the panels] out" for a newer model.

HCC board member Richard Norling commented that the state has four large buildings with similar solar energy systems, including the one he works in, "and that has done fine for them [the state]."

"What kind of maintenance do the panels require?" board member Doris Carey asked.

Tecta will own, maintain and replace the panels, Dodson said, and, in general, they require "very low maintenance."

Questions were also raised about the frequency of inspection and how the panels will hold up in inclement weather.

Panels are typically inspected twice a year, answered construction manager Patrick Bollinger, but the timetable coincides with the area's environment (snow, rain, etc.). He added that the panels are built to withstand high winds and snow.

Once installed, Rabe continued, the system will be monitored in real time and the college and Tecta will have a kiosk that shows the voltage being generated. If anything goes wrong, the company will be able to fix things relatively quickly, he said.

HCC's Johnson explained later over the phone that the buildings to be outfitted with the panels have been selected based on the age of their roofs, because HCC and Tecta wouldn't want to install the panels, which would most likely be there for 20 or more years, on a roof that needs to be replaced in the next few years.

Johnson explained that the college is basically taking advantage of its flat roof space and essentially leasing it to Tecta to generate electricity with solar.

Tecta will then sell the energy the panels generate to a third entity – a power distributor, though they don't know who that will be at the moment. Then the distributor, which earns the tax credits from the project, sells the energy back to the college at a discounted price.

The project itself will cost Tecta about $2.5 million to outfit the buildings with the panels, but because the college is tax exempt and can't collect energy tax credits, "it wouldn't be financially feasible without those incentives," Johnson said of the deal's proposed structure.