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Please help - need approximate figures to justify a municipal solar install

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  • Please help - need approximate figures to justify a municipal solar install

    I'd be very grateful if someone can help steer me through the maze here. We have a new municipal building breaking ground right now in central New Jersey, and there's no solar planned for it - yet. The opinions vary from "too expensive" (the current winner) to "you'll make money." From the research I've done so far, because it's a municipal (local township government) building, the normal financing available for residential, non-profit, and commercial do not apply. Please correct me If I'm wrong.

    I'd like to be able to show, with realistic (if approximate) figures, that installing solar on the new building will be a good deal for local taxpayers.

    Being local taxpayers' money the cost to purchase/install for outright ownership is probably not feasible as it would require a bond and voting. Even though it seems that is the best long-term value.

    It appears the only practical option is to lease, and If I understand it the justification for this is that over the lease term (?20 years?) you save the difference between the leased rate per kWh vs the market rate, which is expected to inflate.

    Is there another way?

    If you use less than you generate, who benefits from the excess? Is that where SRECs come in - how does all that work?

    Are there Federal grants or other incentives that may apply to a municipal installation?

    One gotcha with the lease is that if the price of power falls in the future you are locked into a higher rate - is this a realistic possibility?

    The figures I have calculated are below - do these look right?

    I still need to come up with a savings per year ... any help, flaws and fallacies pointed out, would be appreciated.

    Thanks!
    CALCULATION OF GENERATING CAPACITY OF ROOF
    What Quantity Units
    roof area 19000 square feet
    useable roof area for panels (SE-facing) 9500 square feet
    NJ regional energy production factor 1500 kWh/kW-year
    reduction due to roof orientation 10%
    Assumed generating power per solar panel 320 Watts
    # of solar panels in horizontal direction 56 panels
    # of solar panels in vertical direction 19 panels
    total number of panels 1064 panels
    total kWh (S-facing) 340 kW
    total kWh (SE-facing) 306 KW
    Annual production using NJ energy production factor 459,648 KWh/year
    ESTIMATED MUNICIPAL ELECTRIC USE
    2017 budgeted electric bill $335,000 dollars
    estimated JCP&L 2017 rate 10 c/kWh
    estimated usage 2017 33,500 KWh/year
    PS I have tried asking solar installers all this, but the roof is too small to interest the bigger ones, and the others are reluctant because of the local government lowest price bidding rule and the resulting poor margin or wasted time. Municipal does seem to be weirdly set up make it difficult for taxpayers to benefit from solar!

  • #2
    Start here to find out what incentives may be available. http://www.dsireusa.org/. Given that the regional grid operator PJM is big into renewables I would be surprised if there isn't special incentives. NJ had a big SREC market but its getting phased out in place of other incentives that are not yet in place so figuring payback will be challenge.

    Generally with government entities that don't have taxes to get credits a third party arrangement is best where they take advantage of the incentives and then pay the municipality back.

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    • #3
      That's a great resource, thanks.

      When you say "a third party arrangement" - is that the same as, or different from, leasing?

      I called PJM but that wasn't a productive conversation.

      So if SRECs are going/gone - does that mean net metering is dead?

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      • #4
        You need to turn this project research over to someone who is more informed than you are to better estimate what's required and what's available before proceeding further.

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        • #5
          that's exactly what I'm trying to do...

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          • #6
            Originally posted by habariyako View Post
            that's exactly what I'm trying to do...
            Well, you won't find it in a chat room. Hire someone who's knowledgeable about what's required to bring in and pull off medium size alternate energy projects on time and on budget.

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            • #7
              Originally posted by J.P.M. View Post

              Well, you won't find it in a chat room. Hire someone who's knowledgeable about what's required to bring in and pull off medium size alternate energy projects on time and on budget.
              The OP also needs someone that is up to date with any current building code issues, pv systems, and POCO requirements. Providing specific cost details by someone not working in that state can be dangerous and misleading.

              Trust me when I say get a licensed electrical pv installer to provide the details concerning a commercial system of that size. Paying an expert to design the system will pay for itself over the long run. A grid tie system will pay for itself in time if you can keep the installation costs down which includes not going with a "lease" or making mistakes or underestimations.

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              • #8
                Originally posted by SunEagle View Post

                The OP also needs someone that is up to date with any current building code issues, pv systems, and POCO requirements. Providing specific cost details by someone not working in that state can be dangerous and misleading.

                Trust me when I say get a licensed electrical pv installer to provide the details concerning a commercial system of that size. Paying an expert to design the system will pay for itself over the long run. A grid tie system will pay for itself in time if you can keep the installation costs down which includes not going with a "lease" or making mistakes or underestimations.
                That's what I was alluding to when I suggested hiring someone or some org. that's knowledgeable about what's required to bring in (as in manage, pull off., complete) a project of this type and size.

                I'm pretty sure several here could do it, maybe even me if I was still working, but not pro bono, at least not for a gov. enterprise.

                Point is, you want nice, you pay nice.

                Comment


                • #9
                  Originally posted by J.P.M. View Post

                  That's what I was alluding to when I suggested hiring someone or some org. that's knowledgeable about what's required to bring in (as in manage, pull off., complete) a project of this type and size.

                  I'm pretty sure several here could do it, maybe even me if I was still working, but not pro bono, at least not for a gov. enterprise.

                  Point is, you want nice, you pay nice.
                  +1.

                  My rate is about $250/hr plus travel but then again I am not an expert on pv installations in NJ.

                  I just like to charge for my time.

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                  • #10
                    Hi habariyako,

                    Welcome! Macaddict and I live in NJ. While we have residential installs ourselves, certainly commercial and municipal installs are very, very prevalent in NJ. Don't listen to the nonsense, net metering and SREC credits are ALIVE AND WELL and will likely be around in some form or another for the next 10-15yrs.

                    OMG, definitely do not lease. If you cannot afford the install from operating expenses, or residual funds from an existing bond, then solar may not be for you. Purchasing electric is pretty inexpensive in NJ -- so Solar can have a hard time competing.

                    Have you talked with any solar vendors? I strongly suggest you reach out to our installer -- Green Power Energy (greenpowerenergy dot com). Ask for Tim DeSevo -- fantastic guy -- very knowledgeable. They do lots of commercial and residential installs. Not sure about municipal.

                    Anyway, in terms of payback. Assuming your roof is clear with no shade, and you can setup a good orientation (180 degrees South) and tilt (If your latitude is between 25

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                    • #11
                      One other point of clarity:

                      Net Metering and SREC's are two completely different, complementary things:

                      1) With net metering (I also have JCP&L), your grid-tied PV system will generate 1 for 1 (depending on your rate plan) kWh credits whenever your PV system is on and generating power. These credits will directly reduce (again 1 for 1 depending on your rate plan) your kWh of consumption -- regardless of the time of day, day, and month in which they were generated / consumed. For residential accounts at least, you can carry a credit of kWh from Spring production to "pay" for Fall consumption, for example. The account "trues up" once per year, and your can set this anniversary date (only once for the life of the system) to optimize self consumption. Now, I don't know how this arrangement may or may not differ for Municipal versus residential. I suggest you call JCP&L -- you'll need to talk with the commercial solar department (that's who handles my account even though I'm residential) and ask.

                      One caveat, at least for residential, your PV system can only be sized large enough to be reasonably expected to generate approx 90-110% of your annual consumption. That is to say, your not a solar generator per se, you're just offsetting your consumption.

                      2) SREC's are a completely different thing. It's like cap and trade. There's a "stock market" for SREC credits due to artificial green energy demand created by state law. You get one SREC per MWh generated which you can then hold (if you want up to 5 years) and sell on the Energy market. Prices fluctuate (like stock) all the time. Prices have ranged from ~100 to ~800 per SREC over the past decade (google Flett exchange for example). But have been averaging ~$200 per SREC over the past 5 yrs or so. of course, these could change in value (up or down) at any time, and might even go away at some point depending on state legislation and any grandfathering provisions.

                      If you go to Google and search for "nj municipality solar" a number of interesting articles come up.

                      -Jonathan

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                      • #12
                        hmmm, looks like one of my previous posts got cutoff.

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                        • #13
                          Originally posted by SunEagle View Post

                          +1.

                          My rate is about $250/hr plus travel but then again I am not an expert on pv installations in NJ.

                          I just like to charge for my time.
                          Understood. I'm pretty sure we're on the same page.

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                          • #14
                            You are correct in assuming normal financing for a purchased system will not be available to a government entity.

                            Your best best is honestly going to be finding a larger partner who will work a PPA or Lease for you. Sometimes, we have been know to issue equipment style leases that are more lucrative to the purchaser than a typical PPA.

                            You are going to need to get some bids from the larger solar companies in your area. I recommend at least 3. They will be able to help you figure out savings.

                            Be wary if any of the solar companies say something drastically different than the other 2.
                            Last edited by sdold; 10-26-2018, 05:23 PM. Reason: Removed ad link

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                            • #15
                              I find that when shifting to commercial or institutional solar installations the ownership arrangement options seem to multiply. They generally are customized to take the most advantage of the incentives in place. There can also be dishonest firms that play games usually by front loading costs into the installation cost to artificially increase the cost to take a larger up front tax credit. There also may be other state or utility credits for storage and tracking (Massachusetts are putting them in place). Thus it can become a complex financial transaction that has little to do with solar.

                              There also also a moral/legal concept to discuss. Many systems are selling SREC revenue to offset the cost. Nothing wrong with that but if SRECS are sold even though there are some nice shiny new panels on the building, the power coming from the panels is not green or renewable. The green and renewable claim was sold as a SREC to someone else usually a fossil fueled power plant so they can continue putting carbon in the air instead of reducing it. Indirectly a SREC sold on the market may be keeping a coal plant running. So for a PV system to be a pure green and renewable system if there is a SREC market, the certificates should be retired rather than sold. I would speculate that the vast majority of municipal and institutional PV systems owners are quite happy to sell them and ignore the deceit. The state of Vermont was playing that game and almost got locked out of the SREC market as they were double booking renewable attributes.

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