3 reasons why universities are betting big on renewable energy

Colleges and universities always have been focal points of change. The mixture of academic research, student activism and institutional clout has allowed campus communities to promote widespread technical and social transformations. During the last few years, a few of these institutions have begun to lead in an entirely new area — renewable energy. In September, the University of California system announced an 80 megawatt (MW) procurement contract for off-site solar photovoltaic (PV) electricity, enough to power nearly 13,000 homes.

While this is the largest power purchase agreement on record for a university, it was not the first. Back in 2008, the University of Oklahoma signed an agreement with Oklahoma Gas & Electric to purchase 100 percent renewable electricity, spurring the development of a 44-turbine wind farm. Then, in 2012, Ohio State University signed a 20-year power purchase agreement for 50 MW of wind power. This year, George Washington University and American University teamed up, along with George Washington University Hospital, to secure 52 MW of solar PV from Duke Energy Renewables. Meanwhile, many campuses have installed significant onsite resources. Three universities in particular — Arizona State, Rutgers and Mount Saint Mary’s — have installed more than 57 MW of solar PV combined, or enough to power more than 9,000 U.S. homes.

Three reasons why universities buy renewables

1. Renewables are a good deal

Recent transactions highlight just how competitive renewable power can be. Ohio State estimated its wind transaction would save the university $1 million in the first year alone. Similarly, American said that its renewable energy contract "provides fixed pricing for solar energy at a lower total price than current power solutions." When you start to look at the recent, all-time-low wind and solar prices per kilowatt-hour, it’s easy to see how these deals can be cost-effective.

In 2013, new wind projects in the U.S. had an average wholesale price of just $0.025/kWh (PDF). Meanwhile, recent wholesale solar power purchase agreements have reached $0.05/kWh or lower (PDF). Add in the fact that these deals allow buyers to lock in low prices for 20 years or more, and the savings really start to add up. Ultimately, you don’t need an Ivy League endowment to buy a lot of renewable energy — many leaders are public universities that have discovered it’s a sound economic investment.

2. Top-down leadership

Since 2007, the American Colleges and Universities Presidents’ Climate Commitment has encouraged nearly 700 institutions of higher education to commit to achieving carbon neutrality within a defined timeframe. These commitments to reach carbon neutrality, sometimes by 2025 or earlier, are frequently cited as key components of a university’s decision to purchase renewable energy. A few small colleges already have achieved carbon neutrality, most recently Colby College in Maine.

3. Bottom-up demand

Colleges and universities are also responding to a growing demand from their key stakeholders. Students and faculty around the country are already campaigning for increasing university sustainability programs, and these topics are also on the minds of prospective students. In a 2014 Princeton Review survey of student applicants, “61 percent said having information about a college’s commitment to the environment would impact their decision to apply to or attend a school.” Information about campuses’ sustainability track records, provided through programs such as AASHE's STARS initiative, have brought additional transparency to these efforts and allowed for holistic sustainability rankings. Moreover, for both faculty and students, these renewables projects open up research opportunities. This was particularly true for Ohio State, which employed more than 400 energy researchers in 2013.

Creating social change

At RMI, we’ve shown time and again that renewable energy is held back not by technical limitations but rather by societal inertia, outdated regulations and institutional barriers. Universities, by design, are hubs for experimentation and pushing beyond the norms of the day. As Arizona State's George Basile observed, "When society doesn’t know how to do something, universities are where you go to solve those problems." In addition, universities’ relatively stable growth, long-term ownership of facilities and intellectual atmosphere provide an ideal testing ground for new approaches.

For these reasons, RMI is engaging with universities through a number of programs, including:

• In-depth collaborations, including our effort to help Arizona State develop a 2025 Carbon Neutrality Roadmap;
• The Innovator’s Working Group, a small group of leading universities that RMI will convene to push the envelope and tackle common barriers;
• An underdevelopment program for scaling our in-depth work at universities to systems and communities of schools; and
• An ongoing engagement with the University of North Carolina system through their annual conference to help the state achieve $1 billion in energy cost savings through energy efficiency and renewables over 20 years.

More important, universities matter because they are educating the future leaders and members of our society. Integrating energy efficiency and renewables into a school’s culture exposes each wave of students to more efficient and sustainable processes, systems and behaviors. That’s social change. That’s legacy. That’s scale.

Whether you’re a student, professor or alumnus, it looks as though universities still have plenty left to teach us.