Public-Private Partnerships in Solar Transportation Projects

Source: SolareAmerica

Source: SolareAmerica

Public-Private Partnerships (P3s) are agreements between a public entity (federal, state, or local) and a private company. In the short-term, this partnership attracts private sector investment in a public infrastructure project while providing a long-term financial benefit to the private partner in repayment. Although they are becoming more widespread, P3s are still a relatively new concept in the United States.  Of the 158 P3 agreements signed by governments around the world between 2008 and 2013, only fifteen were in the U.S. private sectors that use new technologies, which  provide expertise and experience, and encourage innovation and efficiency.  Solar energy is an excellent example of a new technology that provides these essential outcomes.

Public-Private Partnerships are speeding up solar energy development and adoption in the U.S. because they are able to incentivize the use of solar and lower the upfront costs of a solar installation. One of the most popular uses of P3s in the solar sector is the Power Purchase Agreement (PPA). “The PPA model offers a very promising path forward, delivering great value to the public sector while tapping the ingenuity of private enterprise.”[1] PPAs involve independent solar power producers who partner with public entities to assist them in implementing solar energy without the usual costs, risks, or necessary expertise typically required. The public entity provides the ground or structure for the solar energy system and the independent solar power producer handles the financing, installation, day-to-day management, and operation of the system. The public entity is then able to buy energy from the system located on its property at a lower and predictable rate, creating a win-win solution for the private and public parties involved.

With transportation dollars increasingly scarce, P3s are a funding option for innovative transportation projects that incorporate solar energy. Solar energy has been used by commercial truckers to help meet idle reduction standards, on canopy coverings at public parking lots to provided power, in highway right-of-way, on airports and many other transportation related venues. The P3 process could further advance the use and production of solar energy in transportation projects by providing clean and predictably priced renewable energy, at a rate similar or lower than utilities provide. The Oregon Department of Transportation (ODOT) is interested in using P3s to develop solar projects along right-of-way owned by the state. ODOT claims that that “the development of only 120 lane-miles of this right-of-way would produce 45 million kilowatt-hours of solar electricity, the amount of electrical energy used by ODOT on an annual basis.”  In a recent example of how this partnership works, a town in Massachusetts used a P3 procurement to install solar in state highway right-of-way to power a new water facility. You can read more about Massachusetts’ experience in a case study recently released by the National Association of Regional Councils by clicking HERE.