Presenter: Jon Fortune, CCSE

1. CCSE Solar Conference:
Distributed Generation Feasibility
Presented by Jon Fortune, P.E.
September 29th, 2009

2. Overview
• Introduction
• Terms
• Feasibility Studies
• Example: Photovoltaics
• Site Specifics
• Utility Tariffs
• Critical Economic Components
• Results 862 kW Solar - Santee Lakes Covered RV Storage
• Fundamental Questions
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3. California Center for Sustainable Energy
Greening Your World!
• An independent voice on energy issues and a trusted,
unbiased resource for businesses, consumers, public
agencies and local governments offering balanced,
objective information throughout the San Diego community
and California
• The California Center for Sustainable Energy is a nonprofit
corporation that helps San Diegans and others adopt
greener practices and save energy and money through
rebates, technical assistance and education.
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4. CCSE’s Energy Advisory Service
Empowering clients with objective information and sound
analysis to green your bottom line
Service Offerings
• IDENTIFYING ENERGY EFFICIENCY OPPORTUNITIES
• Determining how much energy you are consuming and evaluating what measures will save you money
• DEVELOPING RENEWABLE ENERGY SOLUTIONS
• Evaluating and designing integrated, practical alternative energy systems for maximum efficiency and minimum
costs
• QUANTIFYING YOUR CARBON FOOTPRINT
• Developing carbon reduction strategies and greenhouse gas accounting that meet regulatory requirements
• CREATING INCENTIVE AND OUTREACH PROGRAMS
• Identifying potential financial assistance through incentives and rebates and developing training, outreach and
partnerships
• ESTABLISHING MANAGEMENT AND GREEN BUILDING SOLUTIONS
• Applying systematic principles and approaches to energy efficiency and environmental considerations in all phases
of building development 4
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5. Terms
• kW: kilowatt = Unit of instantaneous power. (speedometer)
• kWh: kilowatt-hour = Unit of energy used over time.
(odometer)
• Tariff: utility rate schedule.
• DG: Distributed Generation. Name for on-site power usually
less than 20 MW.
• PV: Photovoltaics. Technological term for direct solar
electricity. Different than electricity generation from thermal
generation (aka solar thermal trough, dish, or power tower)
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6. Why Feasibility Assessments?
• Most organizations have their core competencies and do not
have time to become experts
• Energy costs are just one component of providing the main services your
organization delivers. New technologies and policy changes can quickly and
dramatically change the cost-benefit analysis.
• Value of systems is unique per application
• No “one size fits all” answers
• Value differs by site, load, tariff, utility provider, etc.
• Same terminology does not mean the same performance/value
• 100 kW of Wind ≠ 100 kW of PV ≠ 100 kW Fuel Cell
• kW may be Alternating Current (AC) or Direct Current (DC)
• Feasibility reports direct action by defining constraints and
objectives 6
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7. Is it worth the added cost?
• Client X desired additional solar power to reduce utility costs and
prepare for future expansion of water treatment
• Already had solar installed onsite with positive outcome
• Prepared an RFP and received bids from reputable developers for desired
installation of 500-1500kW of new solar
• CCSE was hired during the RFP process, conducted a thorough analysis
of proposed meters and system sizes
• Results:
• Determined that switching to a new tariff for one meter would yield ~$16k
in savings without solar
• Only 140kW of solar on second meter (with a change in tariff) would yield
maximum savings
• Identified true cost of proposed system sizes, maximizing avoided cost and
minimizing operational cost 7
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8. Example: PV
• When some materials are
exposed to sunlight, they
release small amounts of
electricity giving off what
is known as the
"photovoltaic effect.“
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9. Is PV a good fit?
• Advantages
• Easily deployable and scalable
• More predictable than wind
• Produces energy during Peak times (most expensive/most valuable
times)
• Minimal required maintenance (cleaning) produces excellent returns
• Disadvantages
• May not cover peak times completely
• Will not reduce site demand translating into no demand cost savings
• Cost per kWh can appear higher than other technologies such as
wind and IC engines
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10. Collect Data to Identify Constraints
• How does your site use energy per
day/month/year?
• Collect at least 12 months of discrete load data from utility for kW
and kWh during On, Semi, and Off-Peak periods of each month
• Net-metering savings work when your load can be met by a PV system
1MW or smaller
• How will your site use energy in the future?
• Identify future energy plans, potential for shutdowns, expansion of
loads
• How much square footage is available for PV?
• Are there dual benefit opportunities such as covered parking or LEED
certifications? 10
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11. Consumption/Production Profile
kWh Used/Produced per Hour
Site Load PV Production
250
200
150
Kilowatts
100
50
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
Hours
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12. Net Consumption
Net kWh Used per Hour
Site Load PV Production Net Consumption
250
200
150
100
Kilowatts
50
0
-50
-100
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
Hours
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13. Tariffs, Tariffs, Tariffs
• Unique opportunities for Water
Agencies
• Some new – Critical Peak Pricing, limited
size feed-in tariff
• Some closed – Non-time of use
• Most common – Large Commercial,
Agricultural
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14. Tariff Lowdown
• All tariffs are NOT created equal
• One tariff does NOT fit all customers
• Consumption and production during time-of-use are key to savings
• Net-metering works because you charge the utility at practically the
same rate they charge you at the time you produce it:
(Utility energy rate)*(kWh Meter Load) = Utility Bill
(Utility energy rate)*(DG kWh Production) = Utility Bill Offset
• In general, net-metering is economically better than full sale of
generation through the currently available feed-in tariffs
• Offset your bill costs, not your energy use
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15. Available Incentives
• Federal Tax Credits
• 30% first year with MACRS depreciation
• ~45% of project costs during first year
• Creates value for power purchase agreements
• California Solar Initiative
• http://www.gosolarcalifornia.org
• Performance based incentives over 5 years
• ~20% of project costs
• Renewable Energy Credits
• Earned by any system owner who does not
directly sell their renewable energy to the
utility. 15
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16. Critical Economic Components
• Self-Ownership
• Up-front financing required
• Knowledge of tax-credits (commercial only)
• Specialized management on-staff
• Power Purchase Agreements
• No up-front capital costs
• Ideal for tax-exempt customers who have no tax appetite
• Customer value based on immediate potential for savings
• $/kWh is the magic number
• Long term risk due to long term contract
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17. The Feasibility Assessment Ownership Model
• System management
• Project Economics
The Report
• Utility savings Consumption
Energy Produced •
• System sizing Quantity
• Quantity •
• Payback Time of
• Time of delivery Consumption
Utility Rates
• Demand Charges (kW)
• Energy charges (kWh) 17
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18. Fundamental Questions
• What technology will work best for me?
• Are there energy efficiency measures I should explore before
examining distributed generation?
• What tariff am I on now?
• What tariff will provide me with the most savings when the project is
complete?
• Where will the equipment be installed?
• How will that impact future facility maintenance?
• How much energy in kWh do I use?
• Do I expect to use more/less in the future?
• What is my peak kW demand?
• Do I expect to use more in the future?
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19. Fundamental Questions
• How will I finance this project?
• What incentives are available and for how long?
• Can I lease to own?
• What are the maintenance requirements of this equipment?
• What is the life-cycle of this equipment?
• Will the performance degrade and by how much?
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20. Bottom Line
• A independently validated feasibility
assessment answers the fundamental business
question about the dollar value of energy
generated from solar.
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21. Thank You! Contact Me:
Jon Fortune, P.E.
Manager, Energy Advisory Service
jon.fortune@energycenter.org
858-244-1196
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