Solar power purchase agreement saves Broomfield, Colorado taxpayers $450,000

BOULDER, USA: With zero up-front cost, the city of Broomfield, Colorado will save an estimated $450,000 over the next 20 years thanks to a Power Purchase Agreement (PPA) with Lighthouse Finance. The arrangement is a promising glimpse into a new energy economy: cheaper electricity for building owners, profitability for investors, and clean, local energy production.

“The big story is that the city paid nothing to get all the advantages of solar power,” explains Geoff Manchester, VP of Operations at Lighthouse Solar, “And now they can budget around a fixed electricity cost for the next 20 years.”

The PPA is a financial mechanism that closes the gap between dirty and clean energy systems. In a PPA, the financier owns the system and the building owner only pays for the electricity it produces. The argument is that solar panels are less efficient than a block of coal – that is only true at first. A decade later the solar panels are still producing energy at costs below grid rates, investors in the PPA are still reaping returns - and the block of coal is long gone.

“Investors are thrilled,” explains Scott Franklin, CEO of Lighthouse Solar, “Theyʼre making a safe, predictable return on their investment, and their only question is, ʻWhen can we finance more projects?ʼ”

The combined solar electricity production will be 588,720 kWh annually. Katie Allen, the Capital Improvement Program Manager for the City of Broomfield, coordinated the project and was pleased with how little impact the installation work had on daily operations. “Lighthouse was very sensitive to (our) schedules and created minimum disruption for the public.” she said.

Lighthouse Solar won the bid for the project in 2009 largely thanks to the bottomline advantage of being part of a vertically aligned trilogy of companies including Lumos Solar, the solar equipment value-leader, and Lighthouse Finance. With federal and state incentives for clean energy decreasing in Colorado, this integrated business model of installer, manufacturer and financier has become the industryʼs entrepreneurial answer to make clean energy profitable.

“People donʼt understand the PPA financial model,” explains Manchester, “They were telling the workers they didnʼt want to pay for that ʻsolar stuffʼ but they donʼt understand that they are only paying for the electricity, and that the taxpayers are actually saving money.”