USPS can go green and lock in the price of electricity for up to 20 years. And all that without any upfront capital cost.

Such an arrangement can be made possible through a “Solar Power Purchase Agreement” (SPPA), which is a newer business model. Under a SPPA, USPS would allow a solar service provider to install solar cells on the roofs of major sorting centers. The solar service provider will pay for installation and maintenance and take care of all required paperwork. The solar service provider guarantees USPS a set price for the produced solar power. The purchase price of the generated electricity is typically at or slightly below the retail electric rate one would pay its utility service provider.  USPS owns numerous huge sorting facilities which lend themselves for such an endeavor.

The U.S. Environmental Protection Agency describes a “Solar Power Purchase Agreement” (SPPA) in detail on their website.  According to them USPS would have the following benefits and risks:

Benefits & Challenges of SPPAs
Benefits for host customer Challenges for host customer
  • No upfront capital cost.
  • Predictable energy pricing.
  • No system performance or operating risk.
  • Projects can be cash flow positive from day one.
  • Visibly demonstrable environmental commitment.
  • Potential to make claims about being solar powered (if associated RECs are retained).
  • Potential reduction in carbon footprint (if associated RECs are retained).
  • Potential increase in property value.
  • Support for local economy and job creation.
  • More complex negotiations and potentially higher transaction costs than buying PV system outright.
  • Administrative cost of paying two separate electricity bills if system does not meet 100 percent of site’s electric load.
  • Potential increase in property taxes if property value is reassessed.
  • Site lease may limit ability to make changes to property that would affect PV system performance or access to the system.
  • Understand trade offs related to REC ownership/sale.

Source: U.S. Environmental Protection Agency

USPS should take a good look at SPPAs. It may provide positive cash flow from day one. An additional benefit is a public green image and following up on what some may call a promise. After all, USPS has declared the goal reducing greenhouse gas emission by 20%

We quote from the UPU press kit “Greening the Post

The US operator (USPS) has set a target for 2020 of reducing its GHG emissions by 20%. “Our efforts are having a positive effect, not only
on the environment but also on our bottom line. The energy savings projected for 2009 alone total 37 million USD.

Postal Sanity thinks that a SPPA can provide USPS with a low risk entry into green technologies, paired with financial benefits and a green image. If the solar conversion of several sorting plants proves to be a success then USPS may consider broad deployment of solar roofs on their sorting centers either under a SPPA or by taking immediate ownership of the solar systems.