JTA – The case for state owned solar powered schools

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In November 2019 I contacted Owen Speid, the latest president of the JTA. We met at the annual St James JTA meeting and he made all the right noises about successive governments underfunding education and quote “I’ve said at our annual conference that solar generated electricity is the way to go. Karl Samuda and his PS were there. They responded by installing a couple of units at the ministry of education offices.” A couple days later I submitted my proposals in a document entitled “The case for state owned solar powered schools“, the contents  of which is below. Well, I haven’t read or heard a comment about solar from Mr Speid in the media. Maternity leave, lesson plans and politics within schools appear to be much more important, whereas gross and deliberate underfunding are less so. Very disappointing.

The proposal 

For years governments have blamed principals and schools for all the problems within education whilst not providing resources. The fact is, education is grossly underfunded – so dependent on fees and charity – and the PM admitted this at the opening of the JC stadium, quote “We acknowledge that what the government gives to the education system… certainly to the traditional high schools… is not enough.” Note the media outcry!

Education could be funded significantly better if the government was prudent and invested in solar power. It is as simple as that, prudence with the people’s money.
Astronomical JPS bills are the main reason why schools are broke. Schools consume most of their energy during daylight hours so they should be good candidates for solar power. To determine if solar is a good investment you need to look at the payback period but for schools a better indicator is the potential savings from not paying JPS. The shorter the payback period the better the investment and in Jamaica it is under 4 years which is remarkably low. Hence the government wants the private sector and China to take advantage of these “opportunities”.

Solar in Jamaica
There are solar successes in Jamaica but if they are reported they’ll be buried near the obituaries. Since 2017 Ardenne High has been partially solar powered and reported ridiculous payback figures of under a year but this was only reported by Loop. Ardenne’s monstrous monthly USD32k bills ($4 million) have been reduced 30% by a system that cost under USD120k and the administrators are now struggling to raise USD200k to remove the school completely off the grid. So according to Ardenne a total investment of USD320,000 would save them over USD320,000 per annum. One must ask why this school is on the grid.

We’re interested in potential savings. If Ardenne got a 10 year 20% interest loan it’s monthly repayments would be USD3,200 (1.2x320k ÷ 120 months) and in the first year the monthly savings would be an astonishing USD28,800 ($32k – 3,200). The graph illustrates the potential savings when compared to the rising cost of bills over the 10 year loan period. Electricity rates are directly linked to the USD. In 2014 the exchange rate was around $105 and now it is $140 to 1USD.

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The numbers are unbelievable but Holy Trinity also reported proportionate savings. In 2014 it had bills around $1 million but after installing a $3m solar system bills fell under $700k per month. So by investing $3m the school is saving over $3.5m every year. A $1m bill in 2014 could be around $1.3m today.

However, 4 year payback periods are typical. I have an estimate and bills for Montego Bay Community College and this evidence can be presented as a case study to the ministry. In 2015 MBCC had monthly bills exceeding USD10,000 but a USD475,000 solar system would take them off the grid. If MBCC had a loan agreement of 20% interest over 10 years it’s monthly repayments would be USD4,750. The graph shows the potential savings: in the first year savings could be over USD5k per month and at the end of the loan period the school could be saving over USD16k every month.

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MBCC: rising electricity bills versus fixed rate 20% interest loan repayments of $4,750 over 10 years

Numbers do not lie, if schools were allowed to borrow they would be immediately much better off. Simply apply prudence: instead of indefinitely paying JPS, schools should service fixed-term loan agreements – repayments would be significantly lower than bills – to pay for their own electricity generating facilities.

Private sector investment
Such low payback periods are very attractive so the government plans to use investors to take schools off the grid to quote “Reduce the energy cost to the schools by 40-70% and, ultimately, to reduce the fiscal burden of the Government of Jamaica.” There are numerous problems with this:

  • Investors will borrow the money. (Why can’t schools borrow the money and install their own systems?)
  • Schools would continue to pay for electricity and remain underfunded. (Schools should repay loans and own the facilities thus keeping money in education.)
  • The investor will own the facility, be able to expand and sell excess electricity and make more money. (Schools could do the same so they will be losing this revenue stream.)
  • Small facilities do not need management and need little to no maintenance. After installation the investor will do next to nothing apart from collect lease payments. (Schools can clean their own solar panels. No middlemen are needed.)
  • The government will have control.

The financial case for state intervention is overwhelming. I emailed an economics professor my findings and he wrote the following: Given your figures, it certainly seems like the facts are on your side, I can’t come up with any solid logic for keeping schools on the grid given these numbers.

However, there are other reasons why this policy should be adopted: human rights and the Sustainable Development Goals.

Human rights
It is a basic human right to receive free education of a decent standard. This has been overlooked because of the “Jamaica is poor” excuse, “we can’t afford it“. However, successive governments have further violated the human rights of children by choosing to pay JPS. It is the duty of governments to fund education to the best of their ability and paying JPS when solar power is proven to be a much better option deliberately underfunds education.

The PM also said this at JC; “But schools by their own resources and effort need to do more, and we encourage that.” That is a dereliction of duty and places blame on schools. The vast majority of schools do not have rich donors like JC and we cannot have our most important assets dependent on charity.

The Sustainable Development Goals
Jamaica has made a commitment to the SDGs. The PM said the following: “Jamaica is naturally and irrevocably aligned to the Sustainable Development Goals and at every opportunity we reaffirm our commitment to achieving them.” Our education and energy policies say the contrary.

This solution would impact numerous SDGs:

  • Free secondary school education so more money in parent’s pockets, less stress etc. ‘Auxiliary fees’ are fees and fees impose hardship. SDGs 1-3 & 10.
  • No bills equals more money so better education. Cash for IT equipment, teachers, security, transportation, meal programs, infrastructure etc. 4, 8-10.
  • All schools would have electricity which is essential for IT literacy and quality education. Quality education leads to growth. 8 & 9.
  • The possibility of expansion, supplying energy to the grid and generating revenue. 7 & 13.
  • The fossil fuels that power schools would remain underground, 13 & 15. The PM stated that 50% of our energy generation will be green by 2030 but provided absolutely no information about how this will be achieved. Well this is a solution with numerous positive impacts.

Financing
The money can be easily found, look at recent borrowing:

  • USD68 for NIDS.
  • USD160m Public Sector Transformation Project.
  • USD55m on a new parliament building.
  • USD20m to “further boost national security technology inputs.”

What are the payback periods for these unsanctioned projects and how will a new building help us? Not to mention over USD40 million on BPO office space.

The PM could “encourage” the Development Bank of Jamaica to lend to schools or “encourage” the creation of a schools lending facility within the Bank.
He could “encourage” financial institutions to lend to schools.

There are other financing options. There are numerous international lending facilities for green projects, IRENA (International Renewable Energy Agency) has 20 year loans at very low interest rates for renewable projects.

Do not fear debt. Borrowing for projects that have no returns has indebted us: US$52m on the MoBay Convention Centre; USD30 million on the Trelawny stadium; millions on the St Mary airport. These white elephants cost us millions every day whereas this proposal builds money making assets that pay for themselves inside 4 years but the government is currently spending only $120 million on solar in schools. A lot more was spent on cars, $190m. In the previous year a paltry $62 million was spent whilst the governor general got substantially more, $236m.

I think the case for state investment is overwhelming. Making money at the expense of children is immoral.

Leadership
Our lovely island has been getting terrible press, the second most murderous country. The JTA can show the rest of the Caribbean and other tropical nations how education can be better funded. The PM informed us that Jamaica has visionaries, Jamaica needs action and the people should “Do sumn” so I hope that the JTA will “do sumn” and put forward a written proposal to take schools off the grid. The country’s JPS bill is one reason why teachers are not paid more. Every year over USD100 million is lost and our schools cannot afford it.
There must be change and this is an investment in the future that delivers immediate returns.

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