Macalester College said Thursday that solar power will offset all of its electricity use in two years, resulting in substantial savings on its utility bills.
The St. Paul liberal arts school is the second college in Minnesota to announce solar deals that will result in carbon-neutral campuses. In February, St. Olaf College in Northfield said it would add more solar to its existing wind energy, offsetting all its electricity with renewable power.
Macalester said it will share in the output of up to 40 community solar gardens planned by SunEdison, a St. Louis-based renewable energy company that is emerging as a major investor in the Minnesota solar energy boom sparked by a 2013 state energy law.
Under the law, investor-owned utilities must get 1.5 percent of their power from the sun by 2020. At Xcel Energy, the state's largest utility with 1.2 million electric customers, the law allows companies like SunEdison to build large solar parks and market the power to subscribers who can lock in on lower electricity rates thanks to a pricing structure designed to boost solar investment.
"It is really a straightforward hedge against increases in electric rates," said David Wheaton, Macalester's vice president of administration and finance.
Macalester's 53-acre campus with 65 buildings has electric bills of $1 million to $1.2 million a year, Wheaton said. By locking in a solar electricity rate for 25 years, Macalester expects by the 10th year to be paying one-third less than it otherwise would pay for electricity. By the 20th year, the college could be saving half, he added. He declined to disclose the rate, saying it was confidential under the contract with SunEdison.
More than 400 solar gardens have been proposed in Xcel's Minnesota region, with nearly three-fourths of them in Dakota, Wright and Sherburne counties. Xcel has not yet approved any solar garden connection agreements, but the first projects could be ready for construction this year. Macalester expects its solar electricity to begin flowing in 2016.
Solar gardens offer homeowners and businesses a way to get solar power without installing rooftop panels. Some energy developers are marketing their solar projects exclusively to large businesses and institutions.
Electricity from solar gardens is sold to Xcel at above-retail rates and the amounts are credited to solar garden subscribers' monthly electric bills. Subscribers pay a separate, lower rate to the solar garden developer to build and maintain the solar gardens.
Some subscribers, like Macalester and St. Olaf, are contracting for enough solar generation to balance out the sunless hours when they draw power from Xcel's generators.
Under St. Olaf's solar garden deal with Edina-based Geronimo Energy, the college will lease 90 acres to the energy company. That's where 15 adjacent solar gardens will be built, with a share of the power serving the campus, said Kari VanDerVeen, a spokeswoman for the college. St. Olaf also has a wind turbine that supplies 19 percent of campus power and a share in another Geronimo solar garden off campus.
VanDerVeen said the pay-as-you-go cost of community solar is attractive to nonprofits. "It is not a big initial upfront investment like a wind turbine," she said.
Other Minnesota colleges have been leaders on clean energy. The College of Saint Benedict and Saint John's University in Collegeville had a solar array installed in 2009 and recently expanded it. The University of Minnesota-Morris has two wind turbines, solar panels at a residence hall and a boiler that burns corn cobs or natural gas to produce heat and electricity.
Lowell Rasmussen, UM-Morris' vice chancellor of finance and facilities, said the campus electricity is about 70 percent renewable energy. He said university officials are seriously considering more solar, and have talked to the local utility, Otter Tail Power Co., about it. Otter Tail is subject to the 1.5 percent solar mandate, but is not required to offer solar gardens.
"Solar is now the new frontier," Rasmussen said. "Solar panels are almost on par with the electric rates on the grid. So I think you are going to see an explosion of solar."