Hangar panels generate power and tax credits
- March 28, 2012
Every time a plane takes off or lands at Richmond International Airport, passengers get an unobstructed look at the second largest installation of solar panels in Virginia. Million Air Richmond, a fixed-base operator that offers aviation services, recently had 1,012 solar-voltaic panels installed on the roofs of its three hangars.
Mark Cooke, a principal and the company’s financial manager, began looking into the use of solar panels at the suggestion of his 18-year-old daughter, Caroline, who has a keen interest in green technologies. Cooke, however, sold the idea to Million Air’s other principals based on the potential financial and PR benefits that a solar installation promises.
Urban Grid Solar, a solar installation firm with offices in Richmond and Ashland, designed and installed Million Air’s system, which amounts to a 242.88 kilowatt array. Only Washington & Lee University in Lexington has a larger solar installation in Virginia.
“It was a situation where it just made a lot of sense, financially and marginally, and with all the interest and the feel-good portion of it, we decided to try and make it work,” Cooke says.
The project qualified for federal tax credits and accelerated depreciation on the hardware. Million Air has enough panels in place to generate 70 percent of its annual electricity use. The company uses electricity for lighting, heating and cooling, opening and closing hangar doors, aircraft maintenance and powering a fuel farm, which is used by Million Air’s planes and half of the airport’s commercial airlines.
Nonetheless, a positive return on the investment ultimately will depend on the performance of the Solar Renewable Energy Credits (SREC) market, Cooke says.
An SREC is a nontangible energy commodity that represents all the environmental benefits of electricity generated from a solar electric system. When that system generates 1,000 kilowatt hours or 1 megawatt hour of electricity, an SREC is issued that can be sold or traded on the open market. The price of an SREC fluctuates based on many factors, including supply and demand and the location of the facility. At present, SRECs generated in Virginia are not nearly as valuable as those that come from other states, such as New Jersey or Maryland.
“Whether or not this project ends up being a marginal investment or a good investment is really going to depend on what the SRECs are worth in the future, and there’s no way to predict that,” Cooke admits.
In the meantime, though, the company is enjoying the PR benefits. It has set up a large-screen panel in its lobby that shows customers, for example, the ongoing and cumulative energy savings and carbon offsets the solar installation is providing. “Even with a worst-case scenario that we only get the tax grant, we’re able to generate our own electricity and help the environment,” says Cooke. “So it’s all pretty positive.”