Renewables
Make a Powerful
Case as Hospital
Energy Source
Rapidly rising energy costs
and tightening regulations on
carbon emissions are making
renewable energy, or
“renewables,” increasingly
compelling to hospitals.
Renewables were once viewed
as niche technologies, but
improved funding, incentives,
and technology have positioned
renewable energy to enter the
mainstream.
Renewable energy is energy generated
from natural resources that are naturally
replenished. These sources include
sunlight, wind, and biomass. Renewables
require the right mix of government
policy support, market conditions, and
natural resource availability to be
economically viable and to sustain their
increasing growth and popularity. This
fact sheet has been developed by the U.S.
Department of Energy’s Hospital Energy
Alliance to assist hospital facility owners,
designers, and operators in developing
cost-effective renewable energy projects.
Renewables can help hospitals reduce energy costs and hedge against price increases,
but their benefits extend well beyond the bottom line (see box at left).
Hospitals that utilize renewables stand out among their peers through their commitment
to community health and to providing leadership in environmental stewardship.
Renewables can reduce the impact of hospital operations on power plant emissions
and thus have a positive effect on environmental health. For an example of a tool that
calculates the community effect of your hospital system’s power plant emissions,
see Practice Greenhealth’s Energy Impact Calculator at www.practicegreenhealth.org/
tools/eic/.
Do Renewables Make Sense for Your Hospital?
When considering the use of renewable energy, there are several important market- and
policy-related factors to consider.
• Availability—The availability of natural resources and the practicality of each type of
renewable energy source vary widely by location (see maps on page 2).
• Costs—Capital costs, operating costs, scale of operation, and nancing structure are
all critical to making a well-informed decision.
• Policies and Incentives—Government and utilities offer incentives that may
strengthen the business case for renewable energy.
– Many states have a Renewable Portfolio Standard, a regulation that requires that a
specic fraction of electricity be produced from renewable energy sources.
– Net metering laws encourage renewables by permitting a special metering/billing
agreement between customers and utilities. Buildings’ renewable energy-generating
systems are connected to the power grid, and owners receive a credit for electricity
generated in excess of their own needs and contributed to the grid.
BUILDING TECHNOLOGIES PROGRAM
Hospitals consume about two and one-half times the energy used by the average
commercial building. Because they use so much energy, hospitals are in a position to realize
better than average energy savings—and energy cost savings—through the use of renewable
energies. Hospitals that use these clean energy sources also contribute to a more healthful
environment.
Benefits of Renewable
Energy Use
• Reducedenergycosts.
• Enhancedreputation.
• Bettercommunityhealth.
• Assistanceinachievinggreen
building certification.
– For a list of federal and state
incentives, consult the Database of
State Incentives for Renewables &
Efciency at www.dsireusa.org/.
• Market Factors—The feasibility of a
renewable energy project is affected by
the price of electricity, cost of the fuel
mix, transmission congestion, and
market regulation.
Which Type of Renewable
Energy is Best for You?
Three types of renewable energy are
considered in this fact sheet—solar, wind,
and biomass.
Solar—Solar-powered electrical
generation can be accomplished through
“photovoltaics” and through “solar
thermal” energy. Photovoltaics, the
world’s fastest-growing energy
technology, uses solar cells to convert
sunlight directly into electricity. Solar
thermal uses solar radiation to heat a
fluid. Typically, solar water heaters use
pumps to circulate fluid through heat-
absorbing solar thermal collectors.
Photovoltaics—When considering these
systems, decision-makers must answer
questions about mounting, orientation
and tracking, shading, weather, and
electrical interconnection with the utility.
• Mounting—Solar arrays may be
mounted on the ground, the roof, or
integrated into the building. A roof’s
ability to support weight and wind
loads must be determined before that
option is chosen.
• Orientation and Tracking—There
are “xed-tilt” systems and “tracking”
systems. In the Northern Hemisphere,
xed-tilt systems typically face
southward or toward the sky and are
oriented at an angle that optimizes
panel efciency or system size and
output. Some can be seasonally
adjusted.
Tracking panels follow the movement
of the sun throughout the day. These
systems, which usually are ground-
mounted, generally have a greater
power output per panel than xed-tilt
systems. However, they tend to take
up more land and upfront costs may be
higher.
• Shading—Shade produced by
surrounding objects, such as trees,
buildings, and other solar panels, can
greatly reduce efciency in many
systems. Placement that eliminates
shading makes solar power more
reliable and more economical.
• Weather—In climates with signicant
snow or ice, thought should be given to
how design alternatives affect, and are
affected by, accumulation.
• Electrical Interconnection—It is
important to determine whether a load/
utility side interconnection is available.
In some cases, such as where net
metering is permitted, a hospital can sell
excess power generated back to the grid.
Solar Thermal—Solar thermal systems
have many mounting, orientation,
shading, and weather issues similar to
those discussed in the previous section.
Others include:
• Solar thermal collector types should be
evaluated for their sensitivity to tilt
angle and ability to shed snow and ice.
• There are “at-plate” (glazed or
unglazed), “evacuated-tube,” and
“concentrating” collectors. Glazed
at-plate and evacuated-tube collectors
can achieve temperatures necessary for
a hospital’s domestic hot water or space
heating and are the types that would
most commonly be used.
• In climates with freezing temperatures,
solar thermal systems need freeze
protection.
• Solar thermal tanks vary greatly in size;
the space required to house them may
be a determining factor in deciding
their location.
Wind—Wind can be harnessed by
turbines to produce electricity through a
generator. Small-scale turbines can offer
2
RENEWABLE ENERGY FACT SHEET
Renewable Energy Resources
Wind
Biomass
Solar
These maps provide a view of where three renewable energy sources are located in the United States.
1
1. AdaptedfromNREL.Solar:http://www.nrel.gov/gis/solar.html;Wind:http://rredc.nrel.gov/wind/pubs/atlas/maps.html;Biomass:http://www.nrel.gov/gis/biomass.html.
renewable energy opportunities for
hospitals in select regions. A variety of
issues must be considered.
• Wind turbines are mounted on a tower
to take advantage of the faster and less
turbulent wind at 100 feet or more
above ground. Placement away from
trees, buildings, and other tall objects
further facilitates power production.
• Wind speeds vary locally and should
be measured onsite before a system is
purchased. Small wind systems often
are not cost effective unless the site is
in Wind Power Class 2 or higher.
• Turbines should be located far enough
from buildings to ensure noise control
and safety.
• Availability of a load/utility side
interconnection means that the hospital
may be able to sell excess generated
power to the grid.
• Mounting on buildings is discouraged
due to vibration transmission and
structural concerns.
Biomass—Biomass energy is produced
by burning organic materials such as
plant matter, residues, and waste to
produce electricity or heat. Commercial-
scale biomass heating has particular
potential for rural hospitals. The
following should be considered:
• The availability of nearby natural
resources is a key cost factor.
• Particulate emissions can be high for
some systems.
• Different biomass feedstocks have
different costs, properties, and
sustainability considerations.
• Wood pellets and chips are popular
sources of biomass energy. Pellets are
easier to store and involve lower capital
costs—but the fuel cost is higher. The
opposite is true of chips.
• Alternate nancing options are
available, particularly for combined
heat and power (CHP) plants.
Gundersen Lutheran Health System
La Crosse, Wisconsin • Program began May 2008
Gundersen Lutheran is in the vanguard
of health systems using renewable energy.
Early in 2008, the La Crosse, Wisconsin,
health system set a goal of achieving
energy independence by 2014.
Gundersen’s Envision Program for
energy management and environmental
stewardship expected to achieve a
20 percent reduction of baseline
consumption and costs by the end of
2009. The remaining consumption is
to be offset by generating energy from
renewable sources.
2008 Renewables Project
• Power from the sun—Installed
photovoltaic solar panels on a parking
garage roof. These generate 73,000
kWh of electricity per year and assist
in lighting the garage.
2009 Renewables Project
• Power from waste—Through a
partnership with a local brewery,
Gundersen installed a “cogeneration”
(combined heat and power) system, in
which methane gas from a brewery
process is captured to fuel a biogas
engine that produces electricity. It
began operation in October 2009.
– Will produce 3 million kWh of
electricity per year.
– Will offset 8 to 10 percent of the
electricity used annually at Gundersen’s
La Crosse and Onalaska campuses.
– Brewery uses heat from the engine in
the waste treatment process.
2010 Renewables Project
• Power from the sun—Gundersen is
installing a solar thermal system on
its child-care center. The system is
expected to offset 85 percent of the
facility’s hot water needs.
Renewables Projects Under
Exploration/Development
• Power from wind—Gundersen will
be constructing wind turbines at two
sites. They are likely to be in use by
midyear 2011 and are expected to
provide 25 million kWh of electricity
annually.
• Power from biomass, power from
landfill biogas, and power from rivers—
Preliminary work in each of these areas
has been under exploration and/or
development. Also under consideration
are plans to expand the brewery project.
Financing
• Primarily self-financed.
• Applying savings from energy-
efficiency projects toward renewables.
• Wisconsin’s Focus on Energy Program
covers 5 to 10 percent of project costs.
RENEWABLE ENERGY FACT SHEET
3
Case Study
4
EERE Information Center
1-877-EERE-INFO(1-877-337-3463)
www.eere.energy.gov/informationcenter
Formoreinformation,contact:
Kristen Taddonio
Building Technologies Program
EnergyEfciencyandRenewableEnergy
U.S.DepartmentofEnergy
kristen.[email protected]v
commercialbuildings.energy.gov/hospital
July 2011
RENEWABLE ENERGY FACT SHEET
First Things First
When all is said and done, efficient use
of energy—renewable or otherwise—
offers hospitals the greatest
opportunity to save energy, reduce
energy costs, and improve the
environment. Hospital decision-makers
should examine opportunities to
improve energy efficiency prior to—or
in conjunction with—considering
alternative energy options. This could
include reducing loads and upgrading
theHVACsystem,forexample.
Building systems are interdependent.
Allenergy-efciencyupgradesneedto
be considered together, in sequence,
so that every system is right-sized and
optimally used.
Financing a Renewable Energy Project
Obtainingsufcientnancingsometimesisthebiggestroadblocktotheuseof
renewable energy. When evaluating a project, hospitals should consider the merits of
financing through direct ownership—in which there is an onsite, renewable energy
asset—or third-party ownership—where there is a power-purchase agreement
between the hospital and the owner of the renewable energy asset.
Direct Ownership Financing Options:
• Internally generated cash/general corporate financing—Typically, 70 to 90 percent
of long-term financing comes from internally generated cash. This is considered to
be the best option unless the project is perceived as having a low return and not as
a strategic investment.
• Secured lending—Smaller companies may not have the debt capacity to borrow
easily; secured loans can be obtained by offering collateral. Using the energy asset
as collateral is a relatively new financing option.
• Vendor financing—This is when a vendor helps a manufacturer sell its product by
facilitating financing, typically through a third party familiar with the technical
aspects of the project. This type of financing is useful for hospitals that require
dedicated financing for renewable energy projects.
• Leasing—Aninvestorwouldretainlegalownershipoftheequipment,whichwould
be made available to the hospital through rental payments. There are capital leases
andoperatingleases,whicharenotcapitalized.Leasingmitigatestheriskofan
investment in renewable energy but limits the financial upside.
Third-Party Ownership:
• Energy Service Companies(ESCOs)—Thesearebusinessesthathelpcustomers
to finance, plan, and implement energy-efficiency projects. They establish a
partnership with customers by means of an energy-savings performance contract.
Renewable energy projects can be packaged as part of a larger energy-savings
performancecontract.TheESCOpaystopurchaseandinstalltheenergy-savings
equipment,andthecustomerrepaystheESCOoverthecontractperiodoutof
energysavings.ESCOsguaranteeacertainlevelofenergycostsavings;nancing
is linked to savings. This method typically is used in the public sector for energy-
efficiency projects.
Hospital Energy Alliance
HEAisaforuminwhichhealthcare
leadersworktogetherwithDOE,its
national laboratories, and national building
organizations to accelerate market
adoption of advanced energy strategies
and technologies.
A Strong Energy Portfolio
for a Strong America
Energyefciencyandclean,renewable
energy will mean a stronger economy, a
cleaner environment, and greater energy
independenceforAmerica.Working
with a wide array of state, community,
industry, and university partners, the U.S.
DepartmentofEnergy’sOfceofEnergy
EfciencyandRenewableEnergyinvestsin
a diverse portfolio of energy technologies.