The Photo Voltaic project now under discussion by the School Board is not about the use of “clean energy” for on-site usage or actually about converting sunlight into electricity.
It is about converting limited-use Capitol Fund money into a secure revenue stream for the School District's more broadly used General Fund.
This Board is being asked to spend millions of dollars of Capitol funds based on some long-term estimates. I see it as the Board being asked to bet that these far-off, future assumptions are correct or, at least, close enough to being correct to make this project feasible.
The Rationale Is Shaky
But the School Board needs to remember to base its decision firmly in fiscal reality, not on later disclaimed estimates.
Even the most conservative of estimates is, still, just that, an estimate, not a contractual guarantee. If you look at the bottom of the pages of the presentation, you will find the company’s disclaimers confirming the uncertainty of the estimates shown. I guess this is what is called “the fine print.”
The three attorneys on the School Board ought to understand that members should not have to venture into the realm of uncertain fiscal fantasy. They can and should remain in the written-certainty of the long-term, negotiated contract to insure a secure cash flow into our General Fund.
I am skeptical at this time about the economic viability of the project if it were to be purchased by the District. Especially in our localized micro-climate. While watching the replay of the School Board meeting, I got the feeling that instead of a straight-forward informational presentation, what the Board received was a general sales pitch on solar energy.
The Panels Soon Will be Outdated
Example: The presentation shows that over a 30-year span the solar project would lead to an annual cash flow of almost $8M. Although mathematically correct, the figure was inflated. The life-span of a panel is thought to be only 20 to 25 years, not the 30 suggested by the presentation. I can only guess that the 20-year “cumulative cash flow” figure of $2.75M was not seen as being an impressive enough sales figure to present to the Board.
Does anyone on the Board really think these panels, with just a 14.1 percent efficiency rating (a calculation found in the lab, not a rooftop) will remain in place for the next 20 to 25 years?
Here is the scenario I see playing out:
A future School Board will feel obligated well before the 20th year of operation to replace the now technologically antiquated panels with newer, better, advanced PV panels with efficiencies of 30, 40, even 50 percent and to actually run our schools on the solar energy produced on the school sites.
Even before installing these PV panels, there is the matter of bringing our roofs up to code. This added expense should be factored into the cost of installing the panels. Yet it has not even been mentioned publicly. How much would that upgrade cost? Would it be more than the $1.2M incentive offered by So Cal Edison? Without the incentive, is this project even still feasible?
There is another option the Board should consider: View the District’s 132,000 square foot usable rooftop space as you would any other cash-generating facility in the District and negotiate a lease for the three-plus acres out to the highest bidder. Now that money received, based on assured contractual agreements, would give the District the secure cash-flow it is seeking for its General Fund.
Mr. Laase may be contacted at GMlaase@aol.com
