Harford Community College's Board of Trustees unanimously approved a power purchase agreement Monday, which is expected to save the college more than $1 million in energy costs over 20 years.
Solar panels installed on rooftops of four buildings - the Susquehanna Center addition, Chesapeake Center, Student Center and Joppa Hall – will result in very little financial liability for the institution, but potentially large savings on the college's energy bills.
The agreement with Tecta Solar will have the college paying 5.7 cents per kilowatt-hour with up to a 2.57 percent increase each year, depending on the market. With BGE, HCC is paying about 7.4 cents per kilowatt-hour.
The system is planned to be installed and operational by Dec. 31.
The solar energy system will not only bring economical benefits to the college, but also social ones, including using it as a teaching tool, HCC officials said.
"If we're using this as a teaching tool," board member James Valdes said, "we should also teach the students that a technology like this, that has to have tax breaks and incentives that distort the market, says something about the technology and about whether or not it is ready."
Valdes said there will be "huge changes in solar technology for the better" in four or five years, and asked if the college could swap out the panels for newer technology when it becomes available.
Victor Dodson, HCC director of procurement, said if there is a 7 percent improvement in efficiency and/or cost, the college would negotiate in good faith to switch out the panels because it would be in the best interest of the college and Tecta.
"The only liability is if the price of electricity goes down significantly from where it is now," Rick Johnson, the college's vice president of finance and operations, said Friday. "We, unfortunately, think it's going the other way."
Last week, the college met to discuss a possible partnership with Tecta Solar to install a solar energy system on campus and sell the panels to a third party, which would then sell the energy generated from the panels back to the college at a discounted rate.
Johnson described the agreement as a "hedge."
"It's a good opportunity for the college to hedge our energy requirements for the next 20 years," he said.
The 20-year agreement with Tecta has options to renew at the end of the contract or buy the system outright.
The college will not own the energy system, but basically lease its rooftop space for the solar panels to generate energy.
Whichever company buys the panels from Tecta will take responsibility for those panels - maintenance, replacing, inspections and insurance.
Tax credits for using alternative energy and selling the power back to the college is what will appeal to the third party buyer.
"Tax credits are worth significantly more than [tax] reductions," Johnson explained. "They reduce the tax bill from the bottom line."
The federal government is offering "incentives," Johnson continued, through tax credits to companies to invest in alternative energy.
Since HCC is a tax-exempt non-profit institution, it isn't able to take advantage of those credits.
Where the college does benefit, however, is being able to purchase discounted energy from the third party that buys the energy produced by the panels on the HCC buildings.
During last week's meeting where the trustees reviewed the proposal, Deborah Wrobel, dean of science, technology, engineering and mathematics, explained how the system would work.
Using a hand-generated wheel attached to a light bulb on a wooden board, Wrobel said, traditional energy is created from the interaction of a large magnet and coils of wire on a large scale at power plants. Steam spins the magnet, she continued, and creates a reaction with the wire, which gives us electricity.
To boil water to create steam, most of that energy comes from burning coal and a smaller portion comes from nuclear power and/or gas.
How a solar panel works, Wrobel explained, is with layers of silicone - one with a negative charge and another with a positive charge.
The sun makes the electrons on the top layer of silicone on the solar panels move to other side and vice versa.
This flow of electrons is captured and generates electricity. The difference between the two systems is that a power plant generates an alternating current, Wrobel said, and solar panels create a direct current.
Wiring hooked up to each panel goes through conventional circuit breakers and makes its way to a conduit, which would go to an electrical room.
"I'm sure that as technology changes we're going to change with the time, too," Johnson said. "That's part of the sustainability mission of this college."
In June 2011, Harford County Public Schools activated a 1.2-megawatt multi-school solar program, very similar to what HCC plans to implement.
The school system stated then its program is expected to generate more than 28 million kilowatt hours of energy over 20 years.
"Covering six school properties with more than 6,400 photovoltaic panels, Harford County Public Schools paid no upfront capital costs for the solar energy deployments that promise to reduce overall energy costs with long-term predictable energy pricing while reducing the county's energy demand from the grid," according to a June 2011 summary of the program written by the school system.
"The alternative energy program has resulted saving of approximately $30,000 for this first year," Andrew Cassilly, the school system's resource conservation manager, wrote in an e-mail Monday.
Cassilly added that the program has educational value as well, allowing teachers and students to view how much power the sites are generating in real time via a website.
"This is a great real life example for teachers to use in their lessons," Cassilly wrote.