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By Natasha Dolginsky
With an uncertain economic environment, assisted living communities are looking to cut costs and foster long-term financial stability. Like many other multi-family residences, senior living communities are vulnerable to rising electricity and fuel prices because of the energy-intensive nature of many of their operations.
Desire to lower energy costs and to decrease their carbon footprint is motivating facility managers and CFOs to re-evaluate how to most efficiently meet their energy needs. While many agree that renewable energy could be an effective solution to meet sustainability objectives and improve the bottom line, identifying and selecting the right technology can be an overwhelming process. There are two fundamental solar technologies currently available:
While both solar PV and solar thermal are a valuable and renewable energy resource, the third option, solar cogeneration, eliminates having to choose between the two. This unique hybrid technology combines proven PV and solar thermal technologies in a single system to deliver both electricity and hot water. Standard photovoltaic panels capture about 15 percent of the sun’s energy, discarding the remaining 80 to 85 percent as waste heat. Solar cogeneration captures up to 75 percent of this wasted resource thereby optimizing a building’s solar energy potential and providing customers with more energy per square footage and faster payback than standalone PV or solar hot water systems.
Solar Senior LivingAccording to the U.S. Administration on Aging the United States senior citizen population (anyone over the age of 65) will increase by nearly 80 percent to reach 72 million in 2030, from 40 million in 2010. Growing senior resident population at assisted living communities also means increasing energy costs as well.
La PosadaLa Posada, a 25 year old, not-for-profit, continuing care retirement community in Green Valley, Arizona, is a great example of a senior living community that implemented solar cogeneration to decrease their energy costs and their dependence on fossil fuels. As the largest senior service provider in Southern Arizona, La Posada services over 700 residents and was the first Arizona retirement community to receive national accreditation and has received many awards that showcase its dedication to resident care, including ‘Best Practice’ award for Social Accountability and ‘Award of Honor’ for Exceptional Service and Leadership in the field of senior housing, long-term care and aging services.
In 2011, La Posada made a decision to find a renewable energy solution that aligned with the campus’ sustainability initiatives and provided a hedge against rising energy costs. The company was motivated by its residents’ desire for greener lifestyle options as well as its growing gas and electric expenses. Since the community uses over 15,000 gallons of hot water every day for their showers, cleaning, laundry, dining hall and fitness center, the executive and engineering teams were especially interested in finding a renewable solution that would offset their natural gas usage in addition to electricity.
In Search for SolarIn its search for a solution that respected campus aesthetics, provided a reasonable return on investment, and brought in financial benefits as well as marketing cache to the residents of the community, La Posada considered several renewable alternatives, from wind generation to blanketing the campus with photovoltaic panels. The winning technology for the laundry and fitness center was Cogenra Solar’s solar cogeneration technology selected for its efficiency and quick payback.
Working together with Technicians for Sustainability (TFS), a Tucson-based, locally owned solar installer, Cogenra Solar conducted a site and efficiency analysis of La Posada’s Fitness Pavilion and centralized laundry, two buildings with the highest hot water usages on campus. Buildings’ electricity and hot water usage called for 24 SunPack® modules at the fitness center and 60 SunPack® modules at the laundry facility. Together, both ground-mounted installations take up less than 6,400 square feet, combining the solar cogeneration modules, an inverter, hydronics, and controller in one turnkey, plug-and-play solution.
In about six weeks, Cogenra Solar and TFS designed and installed both systems, totaling 211 kW, with an electric capacity of 36 kW and thermal capacity of 175 kW. Hot water, heated to about 158°F (70°C), is used for the residence’s laundry facility and for pool heating inside the Fitness Pavilion. The electricity generated feeds directly to the community’s existing power supply to support amenities such as lighting, exercise equipment and other electric uses. Access to 24/7 monitoring and performance diagnostics provides La Posada with insight into not only their renewable energy generation but also the financial savings created by the system.
Financing SolarWhile each installation cost depends on a number of factors, including daily hot water usage, boiler efficiency, and geographical location, technology advancements and government incentives have made ‘going green’ not only an environmentally responsible choice, but also a strategic, cost-saving business move. In addition to federal tax credits and accelerated depreciation, several states, including California, Arizona and New York, offer very attractive rebates for businesses that install renewable energy systems.
Alternatively, new financing models allow assisted living residences to integrate renewable energy systems for little or no upfront costs, providing a pay-as-you-go model for on-site energy production that serves as a hedge against volatile utility rates. These models, known as Power Purchase Agreements (PPAs) or Heat and Power Purchase Agreements (HPPAs), enable sustainability programs without redirecting capital from core business objectives.
A high level site evaluation is simple to conduct and can provide a rough estimate of installation costs, system size and payback time.
What’s In It For Me?Implementation of any renewable solar solution can have clear and immediate benefits. First and foremost, savings on utility bills increase Net Operating Incomes, without an increase in resident costs. Secondly, as more environment-conscious public demands sustainable energy practices in their homes, solar energy is an efficient and cost-effective way to meet this demand. Lastly, renewable energy decreases community’s greenhouse gas emissions and reduces their dependence on fossil fuels.
In La Posada’s case, implementing a solar cogeneration solution resulted in a nearly 70 percent offset of their energy use required by the fitness and laundry buildings. Together, the systems displace about 41,858 kilowatt-hours and 11,057 therms of natural gas annually. Solar cogeneration’s unique hybrid of PV and solar hot water qualifies the installation for both solar electric and solar thermal rebates and incentives, which significantly shortens the payback period to less than 5 years.
In addition to saving on energy bills and hedging against future price increases, the retirement community will also reduce their greenhouse gas emissions by 135 metric tons each year. This translates to removing almost 15,100 gallons of automobile gasoline and saving 3,500 trees annually.
This move highlights the company’s dedication to its residents and to the environment. The financial savings generated by the system serve as yet another reminder that businesses don’t have to choose between improving their bottom line and the environment - La Posada is proof that it is possible to do both.
ALFA Member to Member Solutions is a service provider to senior living operators who seek new ideas for how to improve operational performance and better serve residents and their families. Conegra Solar is an allied associate member of ALFA and has provided this article as a resource for senior living communities. Visit the Senior Living Supplier Guide to locate other companies serving senior living communities or read other ALFA Member to Member Solutions at alfa.org/membertomembersolutions.
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