This news isn't big, but it's definitely large.
Solar energy provider SunEdison (NASDAQOTH:SUNEQ) announced that it will be partnering with America's largest city to build its largest solar energy project to date. The company is working with New York City on a 10 MW project that will situate between 30,000 and 35,000 solar panels on what was once one the largest landfill in the world. Closed in 2001, Freshkills will increase the city's current renewable energy capacity by 50%. It is another step in the process to meet the City's goal of a 30% reduction in greenhouse gas emissions by 2030.
According to the City of New York website, the project will help mitigate the stresses that the summer heat places on the grid, when "demand for electricity forces the activation of inefficient in-city 'peaker' plants, some of which burn heavy fuel oil." Consolidated Edison (NYSE:ED), the utility that provides power to New York City, will benefit from the project in that the project is being financed by SunEdison itself. The company will pay for the use of the parkland under a 20-year lease.
The project at Freshkills may just be the beginning of large solar power installations. In 2007, Mayor Michael Bloomberg released his vision, dubbed PlaNYC, for how to prepare New York City for 1 million more residents by 2030. According to the report, "the Public Service Commission (PSC) forecasts that a new five-year $125 million program for large-scale renewable energy projects in the New York City area will add more than 60 MWs of solar PV to Con Edison's service territory by 2015."
From the Big Apple to the Georgia Peach
Outside of New York, there is also big news being made in even the trashiest of places. Republic Services (NYSE:RSG), a leader in non-hazardous waste management, has applied its innovative technology to the Hickory Ridge Landfill in Atlanta. The goal is to help create the largest solar energy generating facility in Georgia. Republic Services' solar energy cover integrates a geomembrane, a large plastic cap that covers the landfill, with a solar panel system. Unlike solar panels, the solar strips are 15 inches wide by 18 feet long and about a quarter-inch thick. Demonstrating further the opportunity in deriving value from retired landfills, Republic Services will be supplying biogas from the Hickory Ridge landfill to a local company.
Republic Services did not solely finance the project, however. It invested $5 million, but it also received $2 million in federal stimulus grant money from Georgia. This was part of the $82.5 million that the state received in American Recovery and Reinvestment Act funding for state energy-efficiency and renewable energy programs.
The degree to which Republic Services continues in converting capped landfills to solar generating facilities remains to be seen. At this point, I suspect that it is not a large part of the company's vision. Despite the apparent success at Hickory Ridge, Republic Services hasn't revealed any plans for future projects of this type. There are certainly ample opportunities, however.
The EPA suggests that there are about 10,000 landfills that could be converted to solar facilities. There is no hard and fast rule as to how these projects are developed, but according to the EPA there are a number of ways that they could be financed. Some examples include owner-operator financing, third-party power purchase agreements, and sale/leaseback models. There are also more than two dozen federal programs that companies could take advantage of to help finance the projects.
Opportunities to convert retired landfills, as SunEdison has done, exist outside of the country as well. SunPower (NASDAQ:SPWR), for example, designed and developed a 2 MW solar power plant on a retired South Korean landfill. Canadian Solar (NASDAQ:CSIQ) installed an 8 MW plant on a former landfill site in Germany.
Foolish final words
It seems that the solar narrative becomes more interesting every day. The partnership between SunEdison and New York City may just be the beginning -- not just in the Big Apple, but around the country and around the globe. There are plenty of opportunities out there for solar energy providers like SunEdison, SunPower, and Canadian Solar, as well as utility companies like Con Ed and waste management companies like Republic Services. I'm certainly interested in seeing whether other solar panel manufacturers appear likely to make similar deals and whether utilities and waste management companies will begin to ramp up the conversion of landfills to renewable energy facilities.
Scott Levine has no position in any stocks mentioned. The Motley Fool recommends Republic Services. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.