Photo by Deb Gau In an effort to reduce utility costs, the Lakeview school district will be starting on a new project — its own solar system that will generate electricity and energy credits for the district. Lakeview Superintendent Chris Fenske said the solar project, approved by the Lakeview School Board earlier this month, will be built on the Lakeview School property in Cottonwood. The row of solar panels will run behind the school’s softball diamond, and across the north edge of the property.

COTTONWOOD — They’ve put a lot of work into trying to save energy at Lakeview School, Superintendent Chris Fenske said. In recent years, Lakeview has switched over to more efficient LED light bulbs and even installed solar panels on the roof of the school building. But when faced with increasing electrical costs, school officials were looking for more savings.

“The thing is, we don’t have an operating levy,” Fenske said of the Lakeview district. “Our board has been wanting to be as efficient as possible,” before having to resort to passing a levy, he said.

The solution Lakeview administrators and school board members arrived at was to try and generate their own electricity.

At their Dec. 16 meeting, members of the Lakeview School Board voted to approve construction of a roughly $750,000 solar project in Cottonwood, as well as a 15-year lease purchase agreement and engineering and professional development services.

Fenske said the cost is more of a reallocation of money that would otherwise have gone toward the district’s power bills. Once the lease is over, Lakeview will own the solar system, and save on electricity.

Fenske said Lakeview began looking into solar power as a way to lower the district’s utility costs.

“That’s kind of what started the process,” Fenske said. In the 2015-16 fiscal year, the school district saw a 16.2% increase in its utility rates, and rates continued to go up over the next two years, he said. “You start the conversations. What can we do?”

Although Lakeview has worked to make its school buildings more energy efficient, those savings weren’t going to completely offset Lakeview’s energy needs, Fenske said. Those needs are also bigger than in the past, after Lakeview’s recent school building expansion.

In 2016, the Lakeview School Board started out looking at a couple of different options for solar power, Fenske said. The first possibility was a solar garden, but the board didn’t see a lot of benefit in that plan.

“You don’t really own your own equipment,” Fenske said.

Lakeview also looked at a solar power purchase agreement, but couldn’t work it out to the point where it was beneficial for the district, he said. The next possibility the board looked at, starting this year, was a lease purchase agreement.

Last week, school board members approved a solar project bid of $690,750 from MXSP (Maximum Service Parts) of Montevideo, as well as a 15-year lease financing resolution with Lease Servicing Center, of Alexandria, and engineering and project development contracts totaling $60,000 with National Microgrid of Montevideo.

The cost of the project, including installation and materials, professional development services and engineering, comes to $750,750. That principal, together with interest on the 15-year lease, comes to a total cost of about $988,000.

“The perception is it’s a new expense. It’s a reallocation,” of Lakeview’s existing utilities spending, Fenske said of the project.

Lease Servicing Center will fund an escrow account, from which solar system construction and other costs would be paid, Fenske said. Lakeview will make lease payments on the system over a 15-year period. From year 16 onward, the district would own the solar system, and it would mean energy savings for the district, he said.

Based on a financial analysis by David Eid of National Microgrid, the solar system could have a positive cash flow of $3,867 in the first year of operation. By the 15th year, the system could have a cumulative cash flow of over $280,000, the analysis said.

By the time the solar system’s warranty expires after 25 years, it could save Lakeview a total of around $1.5 million, Fenske said.

The solar project would have a dozen “pods” of stationary solar panels, that would run in a row along the north side of the Lakeview School property. That would put the solar panels behind the school building, on the far side of the school’s softball field. The panels in the solar system will be raised high enough off the ground to not need fencing, and will be possible to mow around, Fenske said.

“The (Lakeview) building and grounds committee didn’t want a lot of tree removal,” or added maintenance costs from the solar project, he said.

The solar panels are designed to cover 70% of Lakeview’s electrical needs, so they will still be paying a power bill, Fenske said. However, the district would save on the cost in the long run.

There are some challenges for a solar array to help power a school — for one, Minnesota gets the most sun during the summer, when classes aren’t in session. To help work around that, Lakeview’s solar system will be using net metering, Fenske said. Under a net metering system, the electricity generated by the solar panels would go into the local power grid, but Lakeview would be credited for it, and see the savings on its electric bill.

Fenske said the solar system, including the “pods” of solar panels and the framework to support them, will need to be built before it can be installed. He said installation work will hopefully begin in the spring, so the system can be up and running for the 2020-21 school year.