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SOLAR PHOTOVOLTAIC FOR THE PUBLIC SECTOR: Increasing energy savings, reliability and security

SOLAR PHOTOVOLTAIC FOR THE PUBLIC SECTOR: Increasing energy savings, reliability and security. OVERVIEW. What is solar PV and how does it work? Benefits of PV Challenges to implementation Case studies Opportunities: Rebates, Financing & Procurement Three Solar Scenarios Recommendations.

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SOLAR PHOTOVOLTAIC FOR THE PUBLIC SECTOR: Increasing energy savings, reliability and security

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  1. SOLAR PHOTOVOLTAICFOR THE PUBLIC SECTOR:Increasing energy savings, reliability and security

  2. OVERVIEW • What is solar PV and how does it work? • Benefits of PV • Challenges to implementation • Case studies • Opportunities: Rebates, Financing & Procurement • Three Solar Scenarios • Recommendations

  3. WHAT IS SOLAR PHOTOVOLTAIC (PV)?How PV Works • Deposit chemical compounds on to substrate (silicon) • Particle of sunlight hits photovoltaic chemical • Electron knocked loose by particle • Free electrons collected at conductors • DC electricity produced • Inverter converts DC electricity to AC electricity

  4. WHAT IS SOLAR PHOTOVOLTAIC (PV)?Some Quick Facts • No moving parts, no noise, no smell • Used for decades • NASA space stations/satellites • Off-grid applications • 20 - 25 year manufacturer warranty • Produce electricity for 30 + yrs. • 1 % loss in generation per year (warranty takes into account)

  5. BENEFITS OF PV • Energy self-reliance/independence • Stabilize long-term energy prices • Reduce fossil-fuel and natural gas price risks • Ensure reliable supply • Support energy security and community security • Local Economic Development • Supports local labor pool • Environmental Benefits • Improve Air Quality (reduction in N0x, S0x, CO2 emissions) • Linked to asthma, respiratory illness, acid rain, ozone, global warming • Reduce need for large, central power plants • Uncertain supply for new natural gas power plants

  6. BENEFITS OF PV • Other benefits • Budget for fixed energy costs • Avoids uncertain utility rates for public facilities • Benefit from free energy after system is paid off • Off-set peak load demand • Diversify state-wide energy portfolio • Increases supplies and stabilizes prices • Set an example of environmental stewardship for community

  7. CHALLENGES TO IMPLEMENTATION(Why isn’t everyone doing it?) • Front-loaded costs • Pay 30+ years of electricity in 15 - 20 years • Can be addressed through Life-Cycle Costing Analysis and long-term, low-interest financing • Lack of local government resources • Human • Financial • Knowledge and familiarity with technology • Can be provided through assistance programs and/or consultants • Local policy/municipal bureaucracy • Can create barriers to permitting, procurement, installation

  8. ROLE OF LOCAL GOVERNMENT • NREL Study (October 2000) • 200 MW rooftop generation capacity on city and county facilities in California • 1500 MW capacity on school rooftops • Enough electricity to power 1.5 million homes • Study available at www.lgc.org/spire • Stimulating market transformation • Enacting PV- and wind-friendly policies and ordinances • Facilitating investment in renewable energy by reducing financing and transaction costs for residents and businesses (Solar Sebastopol Feasibility Study, Sonoma State University, 2002)

  9. CASE STUDY:SANTA CRUZ CITY HALL ANNEX • 14 kW roof-top PV system • Generates 25,000 kW/yr • 7% building’s power needs • Enough energy for 4 -5 homes • $40,000 grant from Palo Alto Municipal Utility • CEC’s Buy-Down Rebate (50% system cost) • First of many installations

  10. CASE STUDY: SANTA RITA JAIL • 1.18 MW Solar PV • Installed in two phases • R-11 polystyrene foam roofing insulation • New 850 ton high efficiency chiller • Cool Roof • Computerized energy management system • Previously upgraded to efficient lighting systems

  11. CASE STUDY: SANTA RITA JAIL • $7.5 Million Cost ($410,000 Annual Savings) • $2,560,000 rebate from CEC Renewable Buy Down • $1,770,00 PG&E’s Self-Generation Grant • $250,000 from PG&E’s cross-cutting demand program • $306,000 from AB970 funds for solar installations • $84,000 from AB970 funds for Smart Controls • $45,000 from AB970 funds for Cool Roofs • $980,000 low interest loan from CEC • Balance came from existing budget authorizations for roof and energy projects, and first year savings 3 Acres of PV: largest rooftop installation in Western Hemisphere $15 million in savings over 25 year project life

  12. CASE STUDY: SANTA MONICA • Santa Monica • World’s first solar powered ferris wheel (50 kW) • 2 electric vehicle charging stations totaling 33.3 kW • Green Affordable Housing (Colorado Court) • Issued RFPs for City Solar Plan and Solar Schools

  13. CASE STUDY: SAN FRANCISCO • San Francisco • FY 1998-1999: $7,000,000 for electricity • FY 2000-2001: $39,000,000 for electricity • November ballot measures: • Prop. B and Prop H. • Revenue bond for renewable self generation • $100,000,000 • 10 + MW PV • 30 MW Wind • Energy Efficiency • Passed by 73% of voters • First Project: Moscone Center 688 kW www.votesolar.org

  14. CASE STUDY: VALLEJO • Vallejo • Combining efficiency and self generation to provide all of its municipal electricity needs (10 MW) • Installed energy misers on all computer equipment • Installed LED traffic signals • Installed energy usage monitor 24/7 • Funding from ESCOs - repaid out of energy savings (no local tax payer dollars) • Installing 1 MW “solar farm” ($2,500,000 CEC rebate) • Exploring wind turbines and natural gas micro-turbines • 150-500 MW of wind capacity

  15. OTHER CITIES GOING SOLAR • Vacaville • Electric Vehicle program with two-40 kW PV charging stations • Redding • 1 kW at Enterprise Park • RFP for 20kW of PV at City Hall • Riverside • 113 kW solar carport at Riverside Utilities Operations Center provides shade for 152 parking spaces • Large-scale procurement effort • Fairfield • 2.6 kW for EV charging stations at new Transportation Center • Future plans for 1 MW covered parking at park-and-ride lot

  16. OPPORTUNITIES TO LEVERAGE • Rebate Incentives • Low-interest, long-term financing • Third party financing and public/private partnerships

  17. REBATE INCENTIVES • California Energy Commission’s (CEC) Renewable Energy Buy-Down • $4.50/watt up to 50% of system cost • Check on availability of funds for systems over 10 kW • Investor Owned Utilities (PG & E) Self Generation Incentive • $4.50/watt up to 50% of system cost • Systems larger than 30 kW • CEC’s Solar Schools Program • Up to 90% of purchase and installation costs • Maximum $153,000 per school district

  18. REBATE INCENTIVES • U.S. Department of Energy (DOE) Renewable Energy Production Incentive • $1.5 cents per kWh produced for first 10 years (1993 dollars) • Must be a qualifying facility • 10 kW system = approx. $3,000 over 10 years • Congestion Mitigation Air Quality Funds • Potential funding source for electric vehicle PV charging stations • Check with your local utility company for other rebate incentives

  19. FINANCING • CEC’S 4% loan for cities, counties, hospitals, schools for cost-effective energy projects • 11 year payback • Projects must qualify • California Communities • CaLease Financing for up to 10 years • 5.35- 5.85% with $250,000 minimum • Rural Alliance, Inc. • Up to 20 year loans from 5.0 - 5.85%, $10,000 and up • Feasibility studies not required

  20. FINANCING • California Power Authority PULSE Program • $25 - 50 million in low-interest financing for energy efficiency and renewable energy • $2 million minimum • Third Party Financing/ Public-Private Partnerships • Allows for private sector tax benefits • Multi-year contract for electricity below current utility rate • No capital costs for local government • Lease to own option • Revenue Bonds • Revenue from avoided energy costs (energy efficiency) repays bond at no cost to tax payers.

  21. EQUIPMENT PROCUREMENT OPTIONS • RFQ or RFP for “turnkey system” • Bid-less procurement • CA Dept. General Services CMAS • SMUD PV Pioneers Program • Third-party/Public-private partnership

  22. LONG-TERM ENERGY COSTS FOR MUNICIPAL FACILITIES* • Summary of Electric Service Demand and Charges • Period: 12/6/00 - 12/7/01 • Total annual energy needs: 876,640 kWh • Annual energy cost: $121,716.44 • Average cost/kWh: 13.9 cents • Period: 12/7/01 - 5/9/02 • 37% rate increase in first 5 billing periods this year • Average cost/kWh (projected this year): 19 cents *Actual calculations from the Municipal Center in Chico, CA (PG&E’s territory)

  23. SOLAR SCENARIOS FOR MUNICIPAL FACILITIES • Scenario One: 10 kW demonstration project • Produce 15,524 kWh/year (2% electrical needs) • Require about 1,000 sq. ft. unobstructed, south-facing rooftop area • Cost of System (assuming $9,500/kW): $ 95,000 Total Installed Cost - $ 45,000 CEC Buy Down $ 50,000 Cost to City • Cost/kWh: $50,000 / 465,720 kWh = 10.7 cents/kWh • Simple Payback with no escalation: 22.4 years ($0.14/kWh avg.) with 1% escalation: 19.3 years ($0.14/kWh avg.) with no escalation: 17.0 years ($0.19/kWh avg.) with 1% escalation: 14.6 years ($0.19/kWh avg.)

  24. SOLAR SCENARIOS FOR MUNICIPAL FACILITIES • Scenario Two: 50 kW Installation • Produce 77,619 kWh/year (10% electrical needs) • Require 5,000 sq. ft. unobstructed, south-facing rooftop area • Cost of System (assuming $8,000/kW): $ 400,000 Total Installed Cost - $ 200,000 Self-Gen Incentive through PG&E $ 200,000 Cost to City • Cost/kWh: $200,000 / 2,328,570 kWh = 8.6 cents/kWh • Simple Payback with no escalation: 17.9 years ($0.14/kWh avg.) with 1% escalation: 15.4 years ($0.14/kWh avg.) with no escalation: 13.6 years ($0.19/kWh avg.) with 1% escalation: 11.7 years ($0.19/kWh avg.)

  25. SOLAR SCENARIOS FOR MUNICIPAL FACILITIES • Scenario Three: 565 kW Installation • Produce 876,640 kWh/year (100% electrical needs) • Require 56,500 sq. ft. unobstructed, south-facing area • Cost of System (assuming $6,500/kW): $ 3,165,500 Total Installed Cost - $ 1,582,750 Self-Gen Incentive from PG&E $ 1,582,750 Cost to City • Cost/kWh: $1,582,750 / 26,299,200 kWh = 7 cents/kWh • Simple Payback with no escalation: 12.9 years ($0.14/kWh avg.) with 1% escalation: 11.1 years ($0.14/kWh avg.) with no escalation: 9.5 years ($0.19/kWh avg.) with 1% escalation: 8.2 years ($0.19/kWh avg.)

  26. SOLAR SCENARIOS FOR MUNICIPAL FACILITIES Financing the Project • 50 kW System • Net cost: $200,000 • 20 year loan @ 5.75% (RAI) • 25 year lifetime • Net cash flow: $2,015/year x 20 years = -$40,300 • REPI: + $1,400/year x first 10 years = $14,000 • 5 years savings “free energy”: $12,527 x 5years = $62,635 • Net savings $36,335 over life of project • Plus local economic development benefit • Plus air quality benefits (eliminates 96,248 lbs. CO2 in first year!) • Plus increased reliability • IF rates go up, savings are greater • IF energy efficiency, savings are greater

  27. SOLAR SCENARIOS FOR MUNICIPAL FACILITIES Financing the Project • 50 kW System • Net cost: $200,000 • 11 year loan @ 3% (CEC) • 25 year lifetime • Net cash flow: $5,915/year x 11 years = -$65,065 • REPI: + $1,400/year x first 10 years = $14,000 • 14 years savings “free energy”: $12,527 x 14 years = $175,378 • Net savings $124,313 over life of project • Plus local economic development benefit • Plus air quality benefits (eliminates 92,237 lbs. CO2 in first year!) • Plus increased reliability • IF rates go up, savings are greater • IF energy efficiency, savings are greater

  28. ASSISTANCE PROGRAMS • LGC’s Stimulating Public-sector Implementation of Renewable Energy (SPIRE) • Renewable Energy Assistance Packet • Case studies & municipal contacts • Sample Policies, Ordinances, Codes • Sample RFPs • Feasibility studies and design assistance through NREL • CEC’s Energy Partnership Program • Cost sharing program • Program pays first $10,000 in engineering fees • Provides low-interest loans for energy saving projects • Energy audits, feasibility studies, life-cycle cost analysis

  29. RECOMMENDATIONS 1.Leverage opportunities for low-interest financing and rebate incentives while they last. 2.Utilize free assistance programs. 3. Adopt PV- and wind-friendly ordinances. 4. Provide incentives for residential and commercial renewable energy systems(i.e .expedite permit processing, reduce permit fees). 5. Initiate city/county-sponsored PV program for residents and businesses.

  30. For More Information: Local Government Commission (916) 448-1198 pstoner@lgc.org www.lgc.org/spire

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