Sustainable Patterson

Abstract

The Patterson School Foundation is a nonprofit organization located in Happy Valley, North Carolina. Originally, the Patterson School Foundation operated as a teaching school and farm However, they were forced to discontinue their educational mission in 2009 due to economic difficulties. The Patterson School has partnered with the Nicholas School of the Environment to gain insight regarding development opportunities for their property. Specifically, the Patterson School Foundation has requested an analysis of their property that would investigate the land’s potential for economic and sustainable development. Potential projects must be economical in order to avoid selling parts of their property as debt service. The request for sustainability stems from the Patterson School’s commitment to environmental stewardship. Our team sought to find recommendations that would utilize the preexisting resources at the Patterson School. The foundation has large amounts of land available for development and multiple existing buildings that are currently underutilized. Solutions that could more effectively utilize these resources include renewable energy development and transformation of the school into a sustainability destination. Due to the large amount of land resources available, our team was immediately attracted to renewable energies as a development strategy. However, our research uncovered many possible complications for these projects. First, large-scale solar is not an ideal project for the Patterson School. Large-scale solar energy development would require a large section of land to be dedicated to renewable energy development for multiple decades. The Patterson School is currently not comfortable setting aside large tracts of land for such a long period of time. Similarly, large-scale wind is also not feasible for the Patterson School. The North Carolina Mountain Ridge Protection Act prevents the development of wind turbines larger than 100 feet in height from being developed on mountain ridges. This greatly limits wind power development on mountain ridges, where wind speeds are highest. However, to keep with the sustainability requirement of our task we decided to further investigate small-scale wind and solar development at the Patterson School. We created wind and solar models to provide insight for their decision-making process. Data for the wind model was gathered from the Hickory Regional Airport, which served as a proxy location for the Patterson School. Three years of wind data was analyzed and the observed distribution was used to construct a wind power model. The solar analysis was conducted primarily by using PVWatts, a tool created by the National Renewable Energy Laboratory. The analyses of small-scale wind and solar were revealed to be uneconomic options in isolation. Both the wind turbine and solar arrays had a negative net present value. However, we recommend that the Patterson School Foundation construct a small 1 kilowatt wind turbine and a small 15 kilowatt solar array on their property. These renewable energy plays will be used to increase the overall sustainability of the Patterson School. Additionally, they can be leveraged to bring in revenue streams through the introduction of sustainability classes. Since the sustainable energy projects have negative net present values, other revenue streams needed to be pursued. We examined the possibility of introducing small-scale educational classes at the Patterson School. We chose to examine small-scale educational courses for two reasons. First, the Patterson School has the strong educational background to facilitate this type of project. Additionally, our research suggests that there is a strong demand for small scale courses focusing on sustainability. Our team chose to investigate the logistics of offering classes on permaculture and renewable energy. Permaculture was chosen because the Patterson School has expressed interest in this topic, and because their abundant land resources are ideal for demonstration purposes. Renewable energy was chosen as a course topic because we see a strong demand for these types of courses, and because it can leverage the recommended renewable energy installations. To determine the overall economic benefit of the recommended projects a financial model was created. This model considered all expected costs and revenue streams incurred by the renewable energy projects and small-scale educational classes. The model assumes the fixed costs of the projects would be incurred at year zero. Classes are assumed to begin with an enrollment of 10 students per class and grow at a rate of 20 percent each year, until a predetermined class capacity is reached. The variable cost of the course is calculated to grow alongside the class as capacity increases. Under these assumptions the simple payback period of the portfolio was found to be three years when no discount rate was applied. When discounted at a rate of six percent the simple payback period increased to three and half years. After this point in time revenues will grow until the eighth year. After the eighth year, the revenue stream is expected to be steady and generate 52,038 dollars each year. Due to the strong economic performance of the portfolio we recommend that the Patterson School install small-scale renewable energy systems on their property. Additionally, we recommend that the Patterson School introduce small-scale educational courses, starting with classes on permaculture and renewable energy. Our analysis suggests that if the Patterson School Foundation follows these recommendations they will see an increase in the overall sustainability of their organization. Additionally, the portfolio of projects will pay for itself in under four years. This report will examine each project in detail. The proposed plan for the Patterson School takes into consideration the strengths, weaknesses, opportunities, and risks associated with each recommendation.