SunEdison Inc. (SUNE, Financial) has announced that it has signed a contract with Macalester College in Saint Paul, Minnesota to make up for 100% of the college's electricity consumption with solar energy.
SunEdison is an American solar energy company; it produces solar technology and builds and operates solar and wind power plants. It is the world's largest renewable energy development company.
Macalester College to save millions by going solar
The 25-year Power Purchase Agreement (PPA) with SunEdison, Inc. will help Macalester College save millions of dollars on electricity costs.
By procuring a share of output from SunEdison's community solar gardens, the St. Paul liberal arts school has become the second college in Minnesota, after St. Olaf College in Northfield, to sign solar deals that will provide carbon-neutral campuses.
The 53-acre Macalester college campus, which houses 65 buildings, produces electricity bills of $1 million to $1.2 million annually. After the solar deal, the college expects the bill to be one-third less by the 10th year.
Solar gardens enable homeowners and businesses a means of availing solar power without installing rooftop panels.
According to the SunEdison community solar gardens program, a percentage of electricity output from a locally sited community solar system is received by customers. The customer gets credit of up to 120% of usage on electricity bills each month. The customer is compensated at the end of the year for any excess credits that have been unused.
Macalester is interested in sharing the output of up to 40 community solar gardens planned by the St. Louis-based renewable energy company, which is rapidly emerging as a key investor in the Minnesota solar energy uprising, initiated by a 2013 state energy law.
Under the energy law, 1.5% of the power from the sun must be received by investor-owned utilities by 2020. The law lets companies like SunEdison to construct large solar parks and market the power to buyers, who can take advantage of lower electricity rates thanks to a pricing strategy designed to encourage solar investment.
SunEdison Services, which provides global 24/7 asset management, will operate and maintain the solar power plants.
SunEdison intends to start construction of the community solar gardens in 2015 and begin commercial operation in 2016. After the completion of the project, SunEdison is looking at offering this project to TerraForm Power, Inc. (TERP, Financial), a global owner and operator of clean energy power plants, for investment. This project is on the Call Right Projects List for TerraForm Power.
The steady growth of SunEdison
Signing the contract with SunEdison does seem like a lucrative step for Macalester College, as it is believed that the savings over the term of the agreement could be in the millions of dollars. According to David Wheaton, vice president for Finance and Administration of Macalester, the savings that will start as soon as the solar gardens are operational, will benefit both current and future students.
The demand for cleaner, renewable resources provides a huge development opportunity for SunEdison to expand the installations of solar and wind energy projects globally at a faster speed. The company is hoping that Macalester College will set the path for more schools, colleges, and universities to lead and take advantage of the solar gardens program in the near future.
Conclusion
According to Bloomberg, in 2014 SunEdison concluded 1,048 MW of key solar projects. The company has been seeing a solid growth with sizeable power production quantum in Q4 of fiscal 2014, along with a strong queue of impending projects in the pipeline which is expected to take shape in 2015.
SunEdison seems to be growing sensibly with key acquisitions. Currently, SunEdison carries a HOLD rating by the market analysts. But, its primary competitor and arch rival in the sector; Cirrus Logic Inc. (CRUS, Financial) scores better with the analysts, which suggests an uphill road ahead for SunEdison in the expanding renewable energy market.
