'Morris Model' solar financing shines
N.J. county's unique solar-financing program seems to be working with 19 solar-energy systems in place within eight months, one of them at Mennen Arena.
In the last eight months, Morris County, N.J., has undergone a significant energy change of which many of its residents are probably not even aware.
The partners involved call it the "Morris Model." It's a new financing model that allows municipalities to partner with solar-energy companies to incorporate solar energy into their energy portfolio for little outlay.
In June the Morris County Improvement Authority (MCIA)financing plan with Tioga Energy and SunDurance Energy to install about 3-megawatts worth of solar panels by offering up something it already had: property.
Yesterday, the MCIA and Tioga Energy announced Morris County's solar installation was complete and, so far, a financial success.
While there are many property-for-discount-energy programs going on, this one is unique.
Specifically, the MCIA issued $22.3 million in low-interest government bonds to cover the cost of the initial installation. Tioga Energy--the solar-energy company that owns and operates the systems, and sells the solar electricity back to the municipality--used federal income tax incentives unavailable to municipalities, and New Jersey's Solar Renewable Energy Certificates (SREC) program to cover more of the costs. As part of the agreement, Tioga Energy then passed the money it earned from the incentives and SRECs on to Morris County in the form of discounted electricity. SunDurance Energy, working in conjunction with Tioga Energy, designed and installed the solar-energy system configurations for each property.
The pilot program's swift eight-month completion is a test case that could offer a win-win solution for both cash-strapped municipalities and solar-energy companies looking for business. Keep in mind, however, that this Morris Model would only work in states with SREC programs. The county also had the benefit of being home to a local sports complex with lots of roof and parking space on which 1.6 megawatts of the 3.1-megawatts worth of solar panels could be installed.
In states with legislated Renewable Portfolio Standards (RPS), energy companies and utilities are required to either use a certain percentage of alternative energy or buy SRECs to make up the difference. According to the terms of New Jersey's SREC program, Tioga Energy earns one SREC for every 1,000 kilowatt-hours of solar electricity it generates, and is then able to sell those SRECs. The money it makes from the sale of the SRECs is being passed on to Morris County via savings on its electricity bills through a 15-year power purchase agreement.
MCIA says the electricity generated from this program costs 35 percent less than what its local utility is charging them for electricity.
To date Morris County now has 3.1 megawatts of solar power, has solar panels installed on 19 properties (16 of them schools and government buildings) and has saved $3.8 million in electricity costs, according to the MCIA.
Most interesting to New Jersey natives may be that one of the properties being used for solar paneling by the county is the William G. Mennen Sports Arena, Morris County's 2,500-seat arena which includes three ice rinks, and an outdoor rugby field. In addition to the Mennen Arena roof, a solar carport now covers Mennen Arena's 500-space parking lot. Together, the roof and carport solar panels totaling 1.6 megawatts, generate 30 percent of the arena's electricity.