Saturday, March 19, 2016

Geyserville, CA once a SolEd customer Buys Solar Instead and Save at least 50%

The Sonoma County Water agency,  once a customer of SolEd Benefit Corp,  realizes huge saving  by purchasing solar equipment outright. The 60kw system is similar in size to the Marinwood CSD Solar project.  Marinwood CSD approved the SolEd contract at rates approaching 7 times the cost of a similarly purchased system.  Danlin Solar is the same electrical contractor for both projects but purchasing the solar system instead of a Power Purchase Agreement with SolEd will save at least 50% of the cost.

From the staff report from County of Sonoma

This item recommends the Chair to execute an energy services contract (Agreement) with Danlin Corporation for $145,082 for the design, construction, and maintenance of the Geyserville Solar Photovoltaic (PV) Project, located at the Geyserville Sanitation Zone Wastewater Treatment Plant ($139,986 for design/construction and $5,096 for five years maintenance).. 

HISTORY OF ITEM/BACKGROUND: In February 2013, the Chair of the Board of Directors of the Water Agency executed a Memorandum of Understanding with Strategic Energy Innovations to support the development and evaluation of an aggregated solar procurement solicitation for public agency facilities and to allow those facilities to participate in the Sustainable Energy and Economic Development (SEED) Fund program. Using a grant from the California Solar Initiative, Strategic Energy Innovations created a program for public agencies to participate in a regional group purchase of municipal solar projects. The program leverages the grant funding to defer upfront funds for planning, site assessments, and procurement activities while providing technical expertise and best practice knowledge. A similar SEED program was developed by Strategic Energy Innovations in the Silicon Valley, where aggregating 14.4 megawatts of solar projects realized economies of scale resulting in an estimated 12% reduction in solar PV proposal pricing. On behalf of the Water Agency and other SEED program participants, as the program administer, the City of San Rafael issued a Request For Proposals (RFP) in July 2013 for design-build solar energy projects at numerous public facilities in Sonoma, Marin, and Napa counties. The intent of the RFP was to Revision No. 20140617-1 56 develop 6.7 megawatts of solar PV projects across 32 candidate sites, including a 46 kW solar PV system at the Geyserville Sanitation Zone Wastewater Treatment Plant. The proposals received in November 2013 all showed favorable pricing. The City of San Rafael and some of the participating public entities, including the Water Agency, reviewed the proposals and interviewed the top proposers. The winning proposal team was comprised of Sunetric and SolEd Benefit Corporation as the financing and project integration arm and Danlin Corporation as the construction arm. While most program participants entered or planned to enter into power purchase agreements with the Sunetric team, the Water Agency could realize additional savings by purchasing the system outright. Sunetric and SolEd Benefit Corporation offered to withdraw from the team and allow Danlin Corporation to be the lone entity with whom the Water Agency could enter into design/build agreement under the original proposal terms and pricing. Danlin provided additional project experience documentation and project references that proved that Danlin as a stand-alone entity met the RFP experience and qualification requirements. The Water Agency’s Power Resources Fund aggregates all power production and consumption across all Water Agency enterprises. Geyserville Sanitation Zone Wastewater Treatment Plant would host the solar PV system; the Water Agency’s Power Resources Fund would fund the project and the Water Agency would own and operate the solar PV system. 

FINANCIAL ANALYSIS Currently, the Geyserville Sanitation Zone Wastewater Treatment Plant consumes approximately 93,000 kilowatt-hours (kWh), which costs approximately $14,000 per year. A small portion (less than 5%) of this power is offset by an existing small wind turbine constructed in 2012 that was partially funded by a grant from the California Energy Commission. This solar PV project would generate additional power on site and save an estimated $11,850 in the first year of operation based on current electricity rates. Based on a capital construction cost of $139,986, the payback period of the project is 10 years. Even if energy rates rise more slowly than historical averages or maintenance increases faster than expected, the payback period would not extend beyond 12-14 years. Given the project has an estimated useful life of 25 years, this project has financial benefit to the Water Agency. 

Marinwood CSD got burnt on the Solar PPA deal. It was voted on without considering alternatives methods of financing or competitive bids from qualified solar providers. Just changing our rates with PGE can save us 30%!

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