The green mirage: Toronto school board gets free roof repairs for solar panels — or do they?
Canada’s largest school board, the Toronto District School Board (TDSB), is getting an F on management practices. Ontario’s Ministry of Education and Ministry of Energy must also receive a failing grade.
It starts with Toronto’s public schools having leaky roofs. The TDSB, with much fanfare May 2011, found the Holy Grail when they struck a deal with AMP Solar Limited Partnership for solar panels on school roofs. TDSB thought the deal with AMP would result in free roof repairs on 450 schools, and, after AMP recovered the cost of the repairs, TDSB would also receive 14.5% of the solar power revenue generated from the Feed-In Tariff or FIT contracts they hoped to obtain from the OPA (Ontario Power Authority). On paper it sounded wonderful; TDSB’s Director of Education Chris Spence said, “This is a win-win for everyone involved.”
What he meant was, it would be a losing proposition for Ontario’s ratepayers.
What has happened since that announcement shows someone didn’t do their math homework or anticipate what might go wrong.
One year later: there were delays as the rules under the FIT program changed, creating lower prices for roof-top solar, and then McGuinty prorogued the Legislature. The Toronto Sun quoted Chris Bolton, TDBS’s chair, confessing the Board didn’t have an alternate plan. The story went on to say the Ontario government “encouraged” the TDSB to turn to FIT as a resolution to its roof repair backlog. It is not clear if that suggestion came from the Ministry of Education or the Ministry of Energy. If it was, it was as a neat budget gambit to fool the taxpayers while sticking it to the ratepayers. Three weeks prior to the Sun article the Ministry of Education froze new construction approvals, “citing concerns the TDSB was going over budget on building projects and in danger of not wiping out an existing $50 million capital deficit.”
A few “snags”
Fast forward July 25, 2014: the reporter who wrote the Toronto Sun story wrote one for the National Post headlined “Solar panel upgrades for public schools hit snags”. The article infers “the costs” to repair the roofs are “higher than first pegged” and goes on to explain, “That’s because of greater-than-expected costs to the board’s private partner-School Top Solar LP-for roofing, installing the panels and fees to Toronto Hydro for hooking up to its power grid.” It is unclear who School Top Solar LP is—the original TDSB partner was AMP Solar Limited Partnership, but perhaps they flipped the project to take a nice profit (as has happened with so many companies) that have obtained FIT contracts).
The result of this wonder story is that the most TDSB will get out of this free deal will be to replace one-sixth (720,000 sq. ft.) of the 4.3 million square feet of roofs. They can also kiss goodbye to the 14.5% energy revenue Chris Spence thought they would get.
Let’s see where the mistakes were made. First, the math on the 66 MW that will be installed: based on the original roof-top solar prices ($700 per megawatt hour), the 66 MW could have generated in excess of $40 million annually and $806 million over the 20-year life of the contract. The developer (AMP) claimed the 66 MW would produce enough electricity to power 6,000 average homes, which means 57,600 megawatt hours (MWh) of power yearly.
Now the roof repair costs: roof replacement repairs to the 4.3 million square feet would run to $8 or $9 per sq. ft., meaning total costs would be in the $40 million range. Capital cost of solar per MW is $5 million (approximately) as estimated by the U.S. EIA, so 66 MW would have cost $330 million making total costs (including roof repairs) about $370 million and recovery of the cost outlays (including maintenance) should have taken nine to ten years.
If it looks too good to be true, maybe…
The reduction in the FIT rates threw the “free” roof idea into jeopardy. It now looks like the TDSB will have to go cap in hand to the Minister of Education, Liz Sandals, if they want those leaking roofs fixed, without making the Board’s $50-million capital deficit disappear.
What’s funny is that now, as reality hits, a few of the education board trustees interviewed for the National Post said they actually want to blame the school principals (some of them had requested adjustments to the placement of the equipment used to hook up the panels to Toronto Hydro’s electricity grid).
Perhaps Ms. Sandals will solve the TDSB dilemma by getting the teachers unions to back down on their demands for raises and pension benefits until the roof leaks have been plugged!
This is another example of the many logic failures brought to Ontario by the Liberal government and its push for renewable energy on a large-scale!
July 28, 2014
The views expressed here are those of the author and do not necessarily represent Wind Concerns Ontario policy.