College in NM Spends $5 Million on Solar Panels to Save $200K
Apparently, no one in the business studies department was involved in the making of this decision.
Rob Nikolewski of New Mexico Watchdog reports.
College spends $5 million to save $200,000
SANTA FE, N.M. — Santa Fe Community College has just unveiled a solar array that, it says, will save the college at least $200,000 a year on its utility bills.
But the array, funded by taxpayers in a 2010 bond election, will cost $5 million.
You don’t have to be a math major at the college to figure out it would take 25 years of $200,000 cost savings per year to reach the $5 million mark for the project to just break even.
So is the solar array a good deal?
SFCC interim president Randy Grissom thinks so.
First off, Grissom told New Mexico Watchdog the college expects to save more than $200,000 a year on utility bills.
“We took a really conservative approach in doing our analysis,” Grissom said. “We anticipate it will be between $200,000 to $300,000 (a year in savings).”
But even at $300,000 a year, it would take almost 17 years to break even, right?
“We did a ‘net present value’ analysis of the project,” Grissom said, adding that the analysis showed “a gain of $1.5 million” over the life of the solar array, which, Grissom says, is guaranteed to last 25 years.
Comments
Is that the business model that is taught there? Unlimited spending on the taxpayer! Hope they don’t get hail storms!
Actually on a discounted cash flow basis using a conservative 4% discount rate, 50 years at $200,000 would provide a present value of only $4.3 million – so technically there is no investor, except stupid government hacks, who would ever invest in such a payback scheme.
“… is guaranteed to last 25 years.”
Yeah, right.
How many birds will be fried as they fly over these panels?
They will cook their data. I have seen this done on other campuses with energy-efficient upgrades like “special windows” which had to cost a small fortune to change out all of them on this mostly-windowed campus in Texas.
The President would close down the campus for 1-2 weeks during the holidays to save money on the electricity bills and make his plan look better. He also had people put signs on handicap doors that said Please use other door if you are able in order to save energy.