Whatever your take is on the health care reform package that Congress recently passed, the fact remains that the health care industry will only grow over the next several years. With as many as 30 million more customers enrolling in health insurance plans, the need for health care practitioners and facilities like hospitals will only increase. And with more health care facilities, there will be heightened demand for energy. With that in mind, Oakland, Calif.-based Kaiser Permanente, which has 8.6 million customers in 9 states, today announced that it is addressing its surging need for energy by installing 15 megawatts of solar power, spreading the project across 15 facilities across California by the summer of 2011.
Kaiser’s power purchase agreement (PPA) with Recurrent Energy involves installing solar panels on hospitals, medical offices, and other facilities. According to Kaiser, the Recurrent deal is the first step in reaching its goal of having 25% of its energy requirements generated from renewable sources by 2020. Kathy Gerwig, a Kaiser Vice President and its Environment Stewardship Officer, expects the company to pay the same rates as if they were buying the same amount of electricity from local grids–or even less.
How? Recurrent has agreed to pay for the costs of installing, operating, and maintaining the solar panels. Since Kaiser is a non-profit, it cannot benefit from the federal and state renewable energy tax credits made possible from the solar panel installations. Recurrent can, however, so the San Francisco-based power producer can apply for such incentives. Under the PPA’s defined terms, Recurrent will turn around and sell that energy to Kaiser at a competitive rate. Gerwig’s team selected the first 15 locations using the following considerations: buildings with large, open roofs free of mechanical equipment; garages that would not lose parking spaces; open land available for solar construction; and areas where utility companies encourage solar installations by offering rebates. “People are really excited about this,” explained Gerwig. “We’ve had an extremely huge response internally, as employees and managers are clamouring for solar installations, hoping this project would include their sites.”
The expected results? The environmental gains are impressive: almost 16,000 metric tons of CO2 will not be spouted into the air, which is the equivalent of 150 acres of preserved from deforestation, 83 rail-cars full of coal not used, or over 3,000 cars taken off the road for a year. The solar project nicely intertwines with Kaiser’s sustainability plan: 35 facilities already host farmers’ markets, its California hospitals already use 20% less water per bed than those of its competitors, and the company has eliminated PVC-free and latex-free gloves from all of its locations. Now Kaiser is confronting air quality: “We get the connection between greenhouse gas emissions, health, and issues like infectious diseases,” Gerwig explained during a phone interview.
Kaiser’s project could very well serve as a model for other large health companies. Hospitals and health clinics require a steady steam of electricity due to the amount of machines and testing equipment that are often left running all day. Nevertheless, the amount of square footage these facilities require should allow for solar power arrays, fuel cell installations, and electric vehicle recharging stations, mitigating hospitals’ and clinics’ carbon footprint. According to Gerwig, the PPA arrangement Kaiser has with Recurrent makes fiscal sense for any organization. “We are doing this at a cost-neutral or cost savings,” she insisted, “so it would be a solid financial decision for any organization to make, and you are getting on-site renewable energy, which really benefits everyone.”
Who knows if the recent health care legislation will reduce or increase the cost of health insurance premiums. But Kaiser Permanente’s investment is a positive step toward improving our collective health by reducing emissions–patients and their health care providers can breathe a little easier.