Solar Power in Schools: Opportunities Marta Tomic Solar Clean Energy Program Manager
Site Specific Nature of Solar Solar photovoltaic (PV) pricing depends on site selection Roof mount vs ground mount Orientation to south Array tilt System size Shading impacts Electrical system upgrades Roof age / structural enhancements System size impacts available financing solutions Aggregate Net Energy Metering (ANEM) a great solution 2 FOR INFORMATIONAL PURPOSES ONLY
Solar Options for Schools Purchase Estimated 15 year payback Power Purchase Agreement: Approx. 5 – 20% discount on energy MD: 7.5 – 10.5 cents / kWh with 2% escalator Purchase vs. PPA Payback Payback Years Years * For discussion purposes only Image source: http://cleantechnica.com/2014/02/09/solar-leasing-vs-0-solar-loan-scenarios-10-states/ FOR INFORMATIONAL PURPOSES ONLY
Power Purchase Agreement (PPAs) Necessary Agreements PPA Site Lease EPC (Engineering, Procurement, and Construction) O&M Necessary Resources Legal T echnical Financial 4 FOR INFORMATIONAL PURPOSES ONLY
Rules of Thumb for PPAs Need to achieve economies of scale Ground mount: 2 acres Flat roof: 60,000 SF Standing seam metal: 30,000 SF Multiple buildings/sites that aggregate to 500 kW Reduced transaction costs with a single host customer Alternate option: adjacent lot willing to host array for your school 5 FOR INFORMATIONAL PURPOSES ONLY
Typical PPA Terms 15 – 25 years Year 1 PPA rate with annual escalator Termination values & buyout provisions Drop substantially after the 5 th year due to recapture period End of Term Options Purchase System Renew PPA Remove System Caution! Expected savings based on utility rate calculation and escalation assumptions Solar should only offset 80% of total usage. Don’t overpay. Insurance, site maintenance & O&M included System owner keeps SRECs and available incentives 6 FOR INFORMATIONAL PURPOSES ONLY
Net Metering: Only kWh charges count kWh for kWh credit Flat monthly fees are not included in your effective kWh rate kW demand charges are not included in your effective kWh rate kWh based charges Example: $0.11/kWh = all in utility rate 70% - 90% will be kWh charges Remainder not credited via Net Metering Image source: http://www.bge.com/myaccount/billsrates/pages/understanding-my-bill.aspx 7 FOR INFORMATIONAL PURPOSES ONLY
Maryland Commercial Electricity Prices 8 FOR INFORMATIONAL PURPOSES ONLY
PPA Options & Expected Savings Example: Fixed PPA Example: Typical PPA $450,000 $900,000 $400,000 $800,000 $350,000 $700,000 $300,000 $600,000 $250,000 $500,000 $200,000 $400,000 $150,000 $300,000 $100,000 $200,000 $50,000 $100,000 $0 $0 1 2 3 4 5 6 7 8 9 10111213141516171819202122232425 1 2 3 4 5 6 7 8 9 10111213141516171819202122232425 Year 1 PPA Rate: $0.085/kWh Year 1 PPA Rate: $0.085/kWh Annual PPA Escalator: 2% Annual PPA Escalator:0% Grid Escalator: 3% Grid Escalator: 3% 9 FOR INFORMATIONAL PURPOSES ONLY
PPA Options & Expected Savings Example: Market Rate PPA Example: Rate Reset Option in PPA $200,000 $160,000 $180,000 $140,000 $160,000 $120,000 $140,000 $100,000 $120,000 $80,000 $100,000 $60,000 $80,000 $60,000 $40,000 $40,000 $20,000 $20,000 $0 $0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 -$20,000 1 2 3 4 5 6 7 8 9 10111213141516171819202122232425 Year 1 PPA Rate: $0.085/kWh Year 1 PPA Rate: $0.085/kWh Rate reset at year ten to 10% discount Annual PPA Escalator: 3% Annual PPA Escalator: 3% Grid Escalator: 3% Grid Escalator: 2% 10 FOR INFORMATIONAL PURPOSES ONLY
RFP Best Practices - Technical Identify potential install sites Multiple sites in RFP acceptable Could eliminate need for feasibility study Include copies of utility bills for each site in the RFP to determine effective kWh rate Ensure roof warranty remains in tact Performance guarantee Include PVsyst as part of bid submission Require PPA provider to meet a minimum of 80% of expected performance, on average, over a three-year term Warranty / O&M: Included in PPA Rate Request warranty and O&M scope of work 11 FOR INFORMATIONAL PURPOSES ONLY
RFP Best Practices Request multiple bid options Year 1 with annual escalator Fixed payments (0% escalator) Option for rate reset or market-based PPA rate Potential rate “buy down” if school has available funds Section for bidder to propose alternate financing solutions Include any and all assumptions used to determine the proposed PPA rate and expected savings SRECs pricing, interconnection pricing, utility rate escalator Ensure system owner maintains proper insurance List termination values & include buyout option Educational program as part of PPA Ask for educational kiosk, online access to monitoring, curriculum support, site tours, etc. 12 FOR INFORMATIONAL PURPOSES ONLY
MEA’s assistance What is the best way for MEA to provide assistance for solar on schools? Identify top candidate sites for an RFP T echnical assessment to determine appropriate PV sizing Create a template scope of work for RFP Perform solar financial feasibility assessments for rehabs, new construction 13 FOR INFORMATIONAL PURPOSES ONLY
Net Zero Schools MEA looking for one more Net Zero School MEA will work with the Public Schools Construction Program to identify and administer the program $9M funding from Exelon and Constellation merger (BGE) Three new schools constructed in the BGE service territory 2 currently selected (Howard County, Baltimore City) Need one more for 2015 14 FOR INFORMATIONAL PURPOSES ONLY
Thank You! Marta T omic Solar Clean Energy Program Manager Maryland Energy Administration http://energy.maryland.gov marta.tomic@maryland.gov 410-260-2608 15
Solar Power in Schools: Opportunities Milton Nagel Interim Superintendent of Schools Caroline County Public Schools Larry Hartwick Director of Design & Construction St. Mary’s County Public Schools Sean Gallager Assistant Manager, Dept. of Facilities Management, Montgomery County Public Schools Net Zero Schools Contact: Nichele Parker, MEA Program Manager (410) 260-2604 or Nichele.Parker@maryland.gov 16
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