Supreme Court ruling helps Iowa college expand solar array

An Iowa college will soon begin work on what will be one of the state’s largest solar projects, thanks in large part to a recent state Supreme Court ruling.

Luther College is planning at 825 kW project, with 95 kW on the school’s library and the rest in a nearby field alongside an existing array built in 2012.

It’s estimated that the project, expected to be completed this fall, will generate about 1.1 million kilowatt hours annually, providing 6 percent of the 2,500-student campus’ consumption.

“It’s been sized so we know we will be able to consume every electron produced,” said Jim Martin-Schramm, a religion professor and coordinator of the college’s energy and climate program. “We should never be in a position where we will feed power back onto the grid.”

After doing the math, the college concluded that it wouldn’t be worth pursuing a net metering agreement with Alliant Energy, the local utility. As a large institutional customer, Luther College pays a sizable demand charge that amounts to about 35 percent of its monthly bill. Because excess generation would not be applied against that portion of the bill, Martin-Schramm said, revenue from selling excess power at a low wholesale rate would be so little as to be pointless.

The project will, however,  reduce the campus’ peak load. An energy researcher compared the campus’ peak power use with the system’s projected output, and found that campus electricity use peaks around 2 or 3 p.m., roughly when solar production peaks. Generally speaking, peak demand typically is a couple hours later.

If that calculation proves accurate, Martin-Schramm said, it means the college could get a reduction in the demand rate it pays to Alliant.

The Iowa Supreme Court’s ruling in the Eagle Point case last summer, which allowed for third-party ownership of solar arrays, was “absolutely critical” in giving the campus access to the financing required for the $1.6 million project, Martin-Schramm said.

“Because of the supreme court’s ruling, we were able to consider it.”

As a non-profit entity without any tax liability, he said, the college cannot directly take advantage of federal and state solar tax credits. But through a third-party financier — in this case, Oneota Solar — it can.

Initially, Martin-Schramm said, the college will make monthly payments to Oneota Solar that are slightly more than what it pays Alliant. But he expects that the cost of electricity from Alliant will increase a few percent each year, while the price Luther pays to Oneota will remain constant for six or seven years.

After Oneota has collected all of the depreciation benefits, the college will buy the system. And after about 13 years, he said, the college will have achieved payback.

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