Nonprofit organizations make our communities better. They provide vital services and bridge gaps that business and government cannot. These organizations need electricity to operate, just like the rest of us, and many have implemented or are considering implementation of on-site solar projects.
Several financing solutions for nonprofits have proven effective in overcoming financial barriers to implementation, but additional pressures may be faced by these organizations at the intersection of electrical usage profiles, changing electric rate structures, and general site limitations on solar installations. Does that take solar off the table for nonprofits?
A multi-faceted strategy built around solar can be quite effective in significantly reducing electricity cost for nonprofits despite utility rate structure changes and other challenges. Let’s take a closer look.
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First, some general observations about nonprofits.
Most are small to medium usage commercial electrical customers. They occupy a wide variety of building styles and property configurations, many of which constrain total size opportunity for roof-mounted solar or solar carports.
The mechanics of an operations department are not central to the mission of the organization, and operations budgets are limited, so the organization likely does not have the capacity to research and strategize about electricity usage, rate change trends, and renewable options. However, utility costs are often near the top of their list of budgeted expenses. And, as we will see, there can be a variety of usage patterns represented by nonprofits as a group.
Electric utility trends that affect nonprofits include both usage and demand components. Commercial rates continue to shift to a greater demand-driven fraction of the total electric bill. There can be a dizzying number of time-of-use rate variants, both time-of-year and time-of-day, with peaks generally shifting from weekday afternoons to late-afternoons and evenings seven days a week. The later peak hours are less favorable for solar alone with typical NEM tariffs, opening the door wider for storage opportunities.
Lots of complexity to unpack there. How does this affect nonprofits? Let’s look at several categories of nonprofits to answer that.
For an opener, consider your neighborhood school.
Their electricity usage is predominantly Monday through Friday, morning and early afternoon, with partial summer usage. As demand peaks and peak rates shift to later afternoon and early evening, this generally works to the benefit of school electric bills. In many regions, the beginning and end of the typical school year coincides with warmer months, increasing cooling load.
Solar is an excellent tool to offset these loads generally, and storage can help minimize demand peaks in a variety of weather conditions. However, solar system size may be limited due to site considerations, given the higher level of architectural oversight and rigor required for such projects, especially for older facilities. For facilities with significant numbers of discrete HVAC units, smart controls may enable further moderation of usage peaks, minimizing demand charges if applicable.
As with any customer, schools may have opportunities to reduce temperature-independent loads like lighting, and there may also be excellent opportunities to reduce occupancy-independent loads that may run 24/7 — these will be impacted by higher rates no matter when they occur. A solar+ approach will continue to be effective for schools as utility rate structures change.
Next, let’s look at houses of worship.
Whether a church, temple, synagogue or hall, the electrical usage profile for these facilities is typically highest on evenings and weekends, so the shifting peak time-of-use trend works to the disadvantage of these nonprofits. Solar can be effective, but solar system size may be limited by building architecture, appearance or use expectations, historical considerations, parking configurations/limitations, or other site factors.
Consider energy storage as a tool to reduce demand for shorter-duration night and weekend usage periods. For longer usage periods, particularly in high-load HVAC months, consider smart controls, zoning, or even schedule modification as tools to modulate demand and overall usage. And as always, scrutinize 24/7 loads closely. Combining solar and other strategies can maximize savings for houses of worship, despite rate structure change trends.
Finally, consider the not-for-profit residential care facility.
Typically, these have a 24/7 occupancy and usage profile, like residential with daytime occupation and services. HVAC can be a significant percentage of usage, but equipment load can be large as well, particularly if on-site services include food preparation and laundry facilities. Time-of-use rate shifts have a more subtle impact on the electricity cost for such facilities. Time-shifting of energy-intensive services away from the shifted peak rate periods is a good start.
Frequently, care facilities are designed to be residential in appearance and feel, so roof surfaces are segmented, and parking areas are limited, resulting in constraints on solar system size. But the solar that fits can be very effective when combined with other usage reduction measures, independent of utility rate changes.
It’s clear that when it comes to nonprofits, one size does not fit all. It’s also clear that a well-designed and expertly implemented solar system is a foundational utility-savings component for a wide variety of nonprofits, yielding tangible customer benefits despite what future rate modifications the local electric provider may implement. Consider a solar+ strategy to maximize energy cost reductions. Utility rate changes will continue, but so will sunrises, which means solar savings are possible for nonprofit organizations of all types.
Calvin Olsen is COO of k12 Energy.