SDCCD: Use Power Purchase Agreements to Cut Energy Costs and Go Green Without Upfront Capital
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Transcript of SDCCD: Use Power Purchase Agreements to Cut Energy Costs and Go Green Without Upfront Capital
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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Power Purchase Agreements (PPA)
Owner’s PerspectiveOwner’s Perspective
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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Power Purchase Agreements (PPA)
Owner’s PerspectiveOwner’s Perspective
S l PPA St tSolar PPA Structure
Turnkey Construction
Operation and Maintenance
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Power Purchase Agreements (PPA)
Owner’s PerspectiveOwner’s Perspective
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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Power Purchase Agreements (PPA)
Owner’s PerspectiveOwner’s Perspective
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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Power Purchase Agreements (PPA)
Owner’s PerspectiveOwner’s Perspective
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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Power Purchase Agreements (PPA)
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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Power Purchase Agreements (PPA)
SDCCD Site Plans City CollegeSDCCD Site Plans – City College
Learning Resource Center (LRC) ‐ 75 kWLearning Resource Center (LRC) ‐ 75 kW
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Power Purchase Agreements (PPA)
SDCCD Site Plans City CollegeSDCCD Site Plans – City College
Harry West Gymnasium ‐ 155 kWHarry West Gymnasium ‐ 155 kW
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Power Purchase Agreements (PPA)
SDCCD Site Plans Mesa CollegeSDCCD Site Plans – Mesa College
P ki L t 1 386 kWParking Lot 1 ‐ 386 kW
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Power Purchase Agreements (PPA)
SDCCD Site Plans Mesa CollegeSDCCD Site Plans – Mesa College
Parking Lot 2 422 kWParking Lot 2 ‐ 422 kW
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Power Purchase Agreements (PPA)
SDCCD Site Plans Mesa CollegeSDCCD Site Plans – Mesa College
Parking Structure‐ 177 kWParking Structure‐ 177 kW
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Power Purchase Agreements (PPA)
SDCCD Site Plans Miramar CollegeSDCCD Site Plans – Miramar College
Parking Lot – 991 kWParking Lot – 991 kW
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Power Purchase Agreements (PPA)
SDCCD Site Plans Continuing EdSDCCD Site Plans – Continuing Ed
Mid‐City Roof ‐ 44 kWMid‐City Roof ‐ 44 kW
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Power Purchase Agreements (PPA)
SDCCD Site Plans District OfficesSDCCD Site Plans – District Offices
District Office Building23 kW
District OfficeSouth Surface Parking
169 kW
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Power Purchase Agreements (PPA)
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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Power Purchase Agreements (PPA)
Top Things to Consider Top Things to Consider
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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Power Purchase Agreements (PPA)
Top Things to Consider Top Things to Consider
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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Power Purchase Agreements (PPA)
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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Power Purchase Agreements (PPA)
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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Power Purchase Agreements (PPA)
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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Power Purchase Agreements (PPA)
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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Power Purchase Agreements (PPA)
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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Power Purchase Agreements (PPA)
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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Power Purchase Agreements (PPA)
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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Power Purchase Agreements (PPA)
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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Power Purchase Agreements (PPA)
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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Power Purchase Agreements (PPA)
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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Questions?Questions?
David Umstot PE Mark PearsonDavid Umstot, PEVice Chancellor
Facilities Management
Mark PearsonSr. Project Developer
Commercial Projects [email protected]
(619) 388-6546
(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!