At tonight's Unionville Chadds Ford School District board meeting, the administration will be presenting a proposal to "go solar". You can review the feasibility assessment here.
While I am very much in favor of investments that reduce the district's operating costs, the administration's assessment doesn't yet give us a robust view of costs, benefits, and risks. Problems with the proposal include:
The proposal does not address the strategic rationale for investing in solar energy production when our mission and purpose is education
The feasibility assessment does not analyze the project's environmental impact, the legal and regulatory context, or the impact to neighboring properties, all of which are risks to the project's value
The financial analysis relies on unsourced assumptions that are optimistic, omits material expense categories, ignores the time value of money, and does not assess the range of potential financial outcomes through scenario analysis
To provide a more complete financial picture, I developed my own financial projections, based on credible and sourced assumptions, including all likely costs. And then I developed multiple scenarios, both optimistic and pessimistic. Depending on the assumptions used, this project could be a great benefit to the district or a terrible use of funds. I will be discussing this model during the school board meeting tonight.
The bottom line for me:
The district’s feasibility assessment should include a 360 degree assessment of the legal and regulatory environment, risks, environmental footprint, and impact on neighbors
The district should correct its significant financial omissions, by including cost of insurance, maintenance costs, decommissioning and disposal costs, and should discount cash flows when assessing the total benefit of the project
The district should do a sensitivity analysis on key assumptions, like the future price of electricity and the value of SRECs, so we can understand the range of probable outcomes
Once this information is provided, the board and the community will be properly equipped to make a sound investment decision.