Lakeville Area School District 194 is looking for ways to save money on its electric utility costs.
School Board members at their Aug. 15 work session indicated interest in continuing to pursue solar energy savings by entering into a 25-year agreement with Innovative Power Solutions for a community solar garden subscription.
The subscription would save the district up to 15 percent on its utility costs, which this year are expected to be $1.7 million, according to Sara Guyette, District 194 director of facilities and plant planting.
She said the district is pursuing other ways to save operational costs as well, including installing more efficient lighting, roofs and windows.
“This (solar subscription) is just a small piece in making all of our facilities overall more efficient long-term,” Guyette said.
The solar subscription would only include schools served by Xcel Energy, which Guyette said is in the southern area of the district and amounts to 1.1 million square feet of space.
She called demand for power in that area “quite huge,” primarily because the territory includes the district’s two high schools, which are larger, more frequently used buildings with outdoor lighting.
Andy Stahlman, a sales representative with IPS, said the solar subscription program exists because the Legislature mandated Xcel Energy to provide about 400 megawatts of power from solar by 2018.
“Four hundred megawatts is several billion dollars in solar,” Stahlman said. “And basically, Xcel wanted to figure out a program where outside vendors could actually pay for that solar, and they (Xcel) would pay for it over time.”
He said IPS provides funding and has land agreements with landowners in Dakota County or adjacent counties where the solar gardens are installed.
Once the district enters into a subscription, Xcel would credit the district’s electric bill 12.3 cents per kilowatt-hour and the district would pay IPS 11.3 cents per kilowatt-hour. As electric costs increase, the district’s savings would also rise.
“There’s no risk of you paying for anything that you didn’t receive,” Stahlman said.
Stahlman said under the arrangement, IPS would pay in advance amounts Xcel would have had to, and Xcel would pay the district for the solar over the 25-year subscription. He said IPS gets its money back when the district pays them their portion of the credits. IPS invests the money and receives the tax credits.
Stahlman said the district will save money starting in the first year and the savings will grow every year of the subscription.
Xcel Energy will receive renewable energy credits, which Stahlman compared to bitcoin, a fictional value of a credit that “someday could be worth something to say they are energy efficient.”
School Board members expressed interest in the program, using it as a way for students to learn about solar and some raised the potential of using district property to install solar panels.
Stahlman said the district could install about 20 solar panels on building rooftop for about $60,000 or IPS could buy the system and sell the district the energy.
Board Member Jim Skelly said the program has merit and advocated continuing to explore a subscription.
“I think we need to look for ways to save money without impacting classrooms and this is one of them,” Skelly said.
Board Member Terry Lind agreed, stating he could not see any bad side to the proposal.
“It’s a win-win,” he said.
Guyette said they will review a subscription agreement with district attorneys and return to the School Board with a proposal at a later date.