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Solar Financing Solutions for The City of Napa Gopal Shanker December 12, 2008

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Solar Financing Solutions for The City of Napa Gopal Shanker December 12, 2008. Outline of Presentation. Global Energy Issues and Implications The City of Napa\'s Energy Situation The City of Napa\'s Energy Solution Next Steps. Global Energy Issues. Climate Change. Security. Demand .

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slide1
Solar Financing Solutions

for

The City of Napa

Gopal Shanker

December 12, 2008

outline of presentation
Outline of Presentation
  • Global Energy Issues and Implications
  • The City of Napa\'s Energy Situation
  • The City of Napa\'s Energy Solution
  • Next Steps
global energy issues
Global Energy Issues

Climate Change

Security

Demand

Petropolitics

“Foreign Oil”

Black / Brown outs

BRIC Nations

AB 32

Kyoto Protocol

Carbon Tax/Trading

On its own, each issue increases the costs of fossil fuels or of using fossil fuels

Asthma

Cancer

Smog

Monoculture

Soil Depletion

Fertilizer Runoff

Peak Oil

Peak Natural Gas

Agricultural / Ecological

Consequences

Supply

Health Effects

who we are determines what we focus on
Who we are determines what we focus on

Climate Change

Security

Demand

“New

Environmentalist”

“Patriot”

“Businessman”

“Medical

Professional”

“Old

Environmentalist”

“Oil-man”

Agricultural / Ecological

Consequences

Supply

Health Effects

solutions for these energy issues
Solutionsfor these Energy Issues

Climate Change

Security

Demand

All renewable

energy,

coal…

Nuclear,

Renewable Energy,

“Clean” Coal…

Energy from

all sources,

wars…

All renewable

energy except

large scale

hydro…

Energy from

all sources, wars…

All renewable

energy except

biomass…

Agricultural / Ecological

Consequences

Supply

Health Effects

these issues are converging
These Issues are Converging!

Climate Change

Security

Demand

We can no longer develop/afford solutions that solve one problem but exacerbate others

Only renewable energy fits in the intersection of these circles

Agricultural / Ecological

Consequences

Supply

Health Effects

as the convergence accelerates
As the convergence accelerates

Security

Climate Change

Demand

Renewable energy

replaces fossil fuels

The problems merge into a single issue

ENERGY TRANSITION

Agricultural / Ecological

Consequences

Supply

Health Effects

we have made energy transitions before
We have made energy transitions before
  • Whale blubber  kerosene
  • Kerosene  electricity
  • Warships: wind  wood  coal  oil
  • Electricity from coal  electricity from natural gas
  • And now…fossil fuels to alternatives
why not make the transition now
Why not make the transition now?
  • Our biases prevent us from recognizing this as a problem of energy transition
  • Until we eliminate these biases, we will engage in ineffectual arguments and develop ineffective solutions
    • Is Climate Change anthropogenic or not?
    • Food or fuel?
    • Drill, baby, drill!
implications
Implications
  • The transition is not just for a dedicated few, but for all
  • If we don’t make the transition, we will be at serious local and global, economic, environmental, and social risk
  • We need to accelerate the transition, because the convergence is accelerating
we are on the right track in napa county but need to accelerate
We are on the right track in Napa County but need to accelerate
  • Goal: Energy Independence by 2012
  • Napa Valley wineries have adopted solar (PV) at an extraordinary rate
  • They have done so because the COMBINATIONof federal, state, and utility incentives made solar affordable
  • Non-tax paying entities can also benefit from these incentives now
client s perspective on solar
Client’s Perspective on Solar

High Risk /

High Return

Low Risk /

Low Return

Can use tax credits and/or depreciation

Cannot use tax

credits and/or

depreciation

  • Until now, the PPA was the only viable solar financing option for non-tax paying clients. But it provides little more than a hedge against inflation, because the benefits of going solar have to be shared with the PPA provider.
recent developments benefiting local governments and schools
Recent developments benefiting local governments and schools
  • 30% Investment Tax Credit for solar photovoltaics has been extended for 8 years
  • California AB 2466
    • Local governments and schools can receive a bill credit (based on the TOU electricity generation component only) for electricity produced off-site
  • National Development Council has pioneered, using The Gasser Foundation as a pilot, a solar financing solution for non-tax paying entities
outline of presentation1
Outline of Presentation
  • Global Energy Issues and Implications
  • The City of Napa\'s Energy Situation
  • The City of Napa\'s Energy Solution
  • Next Steps
electricity benchmark for the city of napa
Electricity Benchmark forThe City of Napa
  • Annual Usage (kWh): 2,645,926
  • Annual Bill: $393,958
  • Average Rate (per kWh): $0.15
electricity projections
Electricity Projections

Period Cost of Electricity

  • Last 12 Months (~) $393,958
  • In 25th year $1,595,110
  • Over 25 years $21,614,313

Assumptions

6% annual escalation rate

outline of presentation2
Outline of Presentation
  • Global Energy Issues and Implications
  • The City of Napa\'s Energy Situation
  • The City of Napa\'s Energy Solution
  • Next Steps
outline of presentation3
Outline of Presentation
  • Global Energy Issues and Implications
  • The City of Napa\'s Energy Situation
  • The City of Napa\'s Energy Solution
  • Next Steps
next steps
Next Steps
  • Sign Letter of Intent with NDC / Récolte to develop turnkey solar installation and financing solutions
  • File solar rebate applications (Récolte)
  • Study sites/bills to determine whether on-site or off-site generation makes more sense
    • Compensation at full retail versus TOU generation
  • Get pre-qualified for financing
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