let the sun shine! - san diego community college districtprops-n.sdccd.edu/ne/publications...

Let the Sun Shine!Use Power Purchase Agreements to Cut Energy Costs,

Go Green and Reduce Peak Grid Loads Go Green and Reduce Peak Grid Loads Without Upfront Capital

Let the Sun Shine…

Learning OutcomesLearning Outcomes

• Learn what a Power Purchase Agreement (PPA) entailsLearn what a Power Purchase Agreement (PPA) entails

• Learn about the advantages of a PPA

• Learn about the specific advantages of a PPA for public entities such as community college districts and other i i i f hi h l iinstitutions of higher learning

• Learn what solar providers look for in an owner/client

• Learn about different PPA scenarios

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Power Purchase Agreements (PPA)

Owner’s PerspectiveOwner’s Perspective

Wh t i P P h A t?What is a Power Purchase Agreement?

• Agreement to purchase power from a third‐party providerAgreement to purchase power from a third party provider

• Fixed term: 20 years for SDCCDFixed term: 20 years for SDCCD

• Pay only for what power is generatedPay only for what power is generated

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Wh Ch P P h A t?Why Choose a Power Purchase Agreement?

• No initial capital cost to implement, thus it allowed the District to retain bond funding for other programming needs.

• It reduced long‐term maintenance and ownership costs.

• It allowed us to take advantage of California and Federal tax incentives and accelerated depreciation schedules through third‐party financing and ownership that we as a public agency could not otherwise leverage. Thisownership that we as a public agency could not otherwise leverage. This translates to lower electrical rates.

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S l PPA St tSolar PPA Structure

Turnkey Construction

Operation and Maintenance

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What does a PPA include?What does a PPA include?

Third party provides financing, design, permitting, t ti i t ll ti i t d it iconstruction, installation, maintenance and monitoring

of system.

N t t i i l d t b k t d Net metering is also used to bank power not consumed.

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H h ill b id d th h th PPA?How much power will be provided through the PPA?• 2.445 MW AC – enough to power 650 homes for a year

• 18 percent of current base electrical load

• 26 percent of current peak electrical demand

• Potential to add more• Potential to add more

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What will the PPA cost?What will the PPA cost?

• PPA = $0.1274 per kWh

$ ( )• SDG&E = $0.155 per kWh (blended rate)

• Savings = $0.0276 per kWh

• 18 percent savings from current rates

• $110,400 minimum saved annually

• Rates increase four percent per year

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SDCCD Site PlansSDCCD Site PlansEstimated

Site Type Production (kWh) Start-up Date (2010)

City LRC Roof 140,060 SeptemberCity Harry West Gym Roof 257,858 October y y y ,District Office Parking Lot Carport 422,490 SeptemberDistrict Office Building Roof 42,283 September Mid-City Roof 82,844 SeptemberMiramar Parking Lots Carport 1 833 468 SeptemberMiramar Parking Lots Carport 1,833,468 SeptemberMesa Parking Structure Carport 303,079 SeptemberMesa Parking Lot #1 Carport 590,870 SeptemberMesa Parking Lot #2 Carport 848,947 October

TOTAL 4,521,899

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SDCCD Site Plans City CollegeSDCCD Site Plans – City College

Learning Resource Center (LRC) ‐ 75 kWLearning Resource Center (LRC) ‐ 75 kW

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SDCCD Site Plans City CollegeSDCCD Site Plans – City College

Harry West Gymnasium ‐ 155 kWHarry West Gymnasium ‐ 155 kW

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SDCCD Site Plans Mesa CollegeSDCCD Site Plans – Mesa College

P ki L t 1 386 kWParking Lot 1 ‐ 386 kW

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Parking Lot 2 422 kWParking Lot 2 ‐ 422 kW

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Parking Structure‐ 177 kWParking Structure‐ 177 kW

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SDCCD Site Plans Miramar CollegeSDCCD Site Plans – Miramar College

Parking Lot – 991 kWParking Lot – 991 kW

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SDCCD Site Plans Continuing EdSDCCD Site Plans – Continuing Ed

Mid‐City Roof ‐ 44 kWMid‐City Roof ‐ 44 kW

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SDCCD Site Plans District OfficesSDCCD Site Plans – District Offices

District Office Building23 kW

District OfficeSouth Surface Parking

169 kW

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Top Things to Consider Top Things to Consider

1 Look carefully at your objectives Weigh advantages and1. Look carefully at your objectives. Weigh advantages and disadvantages of all options to determine what makes the most sense for your organization.

2. Identify sites prior ahead of time, factoring in long‐term facilities master plans and scheduled maintenance activities (e.g. roof replacements).

3. Understand and analyze current electrical loads to size your y ysystem appropriately.

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4. Consider selecting through competitive4. Consider selecting through competitive process rather than direct sourcing or negotiating with a single entity.

5. Take advantage of net metering and bank kWh you don’t need for future consumption.

6. Develop clear terms/conditions of your PPA and Site License Agreement and share at the gtime of proposal and selection.

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l l h7. Closely scrutinize the financial backing of the PPA provider.PPA provider.

8. Clearly identify how the system will be monitoredsystem will be monitored and how billing will be performed.

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Environmental BenefitsEnvironmental Benefits By installing a solar system, we will be reducing global warming,y g y , g g g,mitigating natural disasters, and helping to preserve our planet.

Over the first 20 years of production: Over the first 20 years of production: Reduce Carbon Dioxide emissions by 111,747,343 pounds Equivalent to 176,169,816 vehicle miles not traveledEquivalent to planting 260 817 mature trees Equivalent to planting 260,817 mature trees

Conserve 159,751 barrels of oil Reduce Nitrogen Oxide emissions by 28,501 pounds Reduce Nitrogen and Sulfur Oxide emissions by 31,351 pounds

District retains renewable energy credits.

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About Borrego SolarAbout Borrego Solar

Founded in 1980

HQ in San Diego with offices inHQ in San Diego with offices in Berkeley and Boston

Leading provider of turnkey solar g p yphotovoltaic systems

65 employeesp y

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About Borrego SolarAbout Borrego Solar

Finance and Technology agnostic

Fully funded integrated PPA product

Commitment to excellence in solar design and construction

Current client list includes: schools (K‐12 & Higher Ed.), cities, water agencies and private corporationsagencies and private corporations

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Solar Technology DecisionsSolar Technology DecisionsSolar Panels/Modules Support Structures

R f M tCrystalline Silicon• 40 year old technology• >80% of market

Roof Mount• Most common type• Cost effective• Few or no penetrations

• High efficiency• Many suppliers

p

Covered Parking• Dual benefit• DSA Pre‐Approved

Thin Film• First Solar only viable• CdTe technology• Lower efficiency

Tracking• More energy per sq ft

dd l

• Can be tracking

Lower efficiency• Ideal for large solar farms

• Additional maintenance• >500kW to pencil• Ground or Carport

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Solar Technology & PricingSolar Technology & Pricing• Crystalline technology is mature and efficienty gy

• Improvements in efficiency are incremental

h l• Prices are at historic lows

• Prices stable since Q3 2009

• Roofs and carports most attractive locations for community colleges

• Customer savings are driven by govt. incentives

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Factors Affecting PriceFactors Affecting PriceVariable Price of Energy ($/kWh)

System Size Increase Annual Escalator Increase Tracking System Covered Parking Grading or ground prep Long Electrical Runs REC Ownership

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Power Purchase Agreements (PPA)Factors Affecting Price Current SubsidiesFactors Affecting Price – Current Subsidies

• State / Utility Rebates/ y

‐ Decline over time

C i diff t f & l

All subsidies go to the PPA Provider

‐ Come in different forms & values depending on utility

• Federal Ta Credit / Cash Grant The benefit to the

• Federal Tax Credit / Cash Grant

‐ 30% of the Gross System Cost

Educational Institution is a lower PPA Price / kWh

• Accelerated Depreciation

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BenefitsBenefits

No capital costs

Limited production risk

Predictable energy costs

LEED Points (new building or Limited production risk

No O&M responsibility

LEED Points (new building or retrofit)

Demonstrate commitment to Buy option

Independence from fossil fuels

Demonstrate commitment to sustainability

p

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ChallengesChallenges

20 Y T• 20 Year Terms

• Unfamiliar Contracts

• Ownership of REC’s and residual value

• System insurance• System insurance

• Site characteristics

• Control and flexibility

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Secrets to SuccessSecrets to Success

• Low PBIs = Big Systems & TrackersLow PBIs Big Systems & Trackers

• Some locations qualify for more tax creditsta c ed ts

• Some municipal utilities do not allow PPAs

• Know what your energy costs (watch out for demand charges)

• Do whatever works for you: GO Bonds, CREBs, QECB, PPA,….

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Secrets to SuccessSecrets to Success

Solar, when done

right will save theright, will save the

Institution money

and reduce longand reduce long

term risk.

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xxxxxx

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Let the Sun ShineLet the Sun Shine…

It’s time to let the sun shine in….

`

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Questions?Questions?

David Umstot PE Mark PearsonDavid Umstot, PEVice Chancellor

Facilities Management

Mark PearsonSr. Project Developer

Commercial Projects [email protected]

(619) 388-6546

j [email protected]

(619) 792-1166

Don’t forget to let the Sun Shine In!

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Don t forget to let the Sun Shine In!

let the sun shine! - san diego community college districtprops-n.sdccd.edu/ne/publications...

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