Tag: Solar PPA
Yesterday we were privileged to be a part of the dedication ceremony for the solar array Standard Solar recently completed in Worton, Maryland – one that sits at the forefront of solar in the state, as it is the first public sector project to take advantage of Maryland’s aggregate net-metering law that allows more than one facility to make use of the electricity generated by a single system. Kent County is truly leading the way for other communities to make use of large scale installations to power multiple buildings. In this case, the 1.5 MW system will serve Kent County High School, KCHS Radio Antenna, Worton Elementary School, the Kent County Community Center and the County Public Works Facility north of Chestertown.
On hand to dedicate the system and cut the ribbon (yes, we had giant scissors!) were county and state officials and a group of Kent County Parks and Recreation campers who had an opportunity to see the system up close and will further benefit from the system moving forward, as Kent County plans to incorporate the system into its science curriculum.
Developed with our partner Washington Gas Energy Systems, who will own and operate the system, this array is a shining example of community leaders’ foresight. Along with providing a large percentage of the power needed by the facilities mentioned above, the rate secured for the electricity through a power purchase agreement will save Kent County money on their utility costs. In addition, the array will serve as an educational tool for students as a real-world example of the promise of a clean energy future.
Project financing and the basics of PPAs
From the East Coast to the West Coast and everywhere in-between, businesses and organizations of all types—universities, colleges, municipalities, government buildings, agricultural and farming operations and more—are realizing the benefits of solar power. One popular option available for financing commercial-scale installations is a power purchase agreement, or PPA. Many of the projects that we have worked on in the last few years or so have come to fruition as a result of this kind of partnership, from the Perdue installations in Delaware and Maryland to Washington, DC’s American University. If your organization is interested in benefiting from solar energy, this type of financing should most certainly be on your radar. So how does it work?
PPAs are arrangements through which a host customer agrees to provide the physical property on which a solar PV system is built, and purchases the resulting electricity at a stable price for a number of years. The system is owned and maintained by the developer, or solar service provider.
PPAs are attractive to organizations for several reasons. The arrangement allows an organization to fix the cost of electricity for many years, and do so without much of an upfront capital investment. The installation also increases the valueof the property on which it’s built. In addition, the organization can meet its own internal goals for sustainability while making a visible, tangible commitment to the environment.
For example, in June of last year, we installed a 753 kW system for Maryland’s Anne Arundel Community College (AACC). The entire photovoltaic (PV) system was installed on top of a covered parking structure – the largest such system in Maryland and one of the largest carport systems on the East Coast (pictured below). It is expected to generate approximately one million kilowatt hours of electricity in its first year of operations, enough to power about 100 average homes and the equivalent of eliminating greenhouse gas emissions from more than 77,000 gallons of gasoline per year, or over 1 million gallons over the next 15 years. The system is projected to save the college more than $300,000 over the next 15 years.
AACC received a $750,000 grant from the Maryland Energy Administration via the American Reinvestment and Recovery Act to contribute to the financing of the system. Washington Gas Energy Services (WGES) provided the financing for the balance of the project costs and owns and operates the PV system. WGES will sell the output of the solar panels to AACC through a 15-year PPA, enabling AACC to host the solar project without any capital outlay.
Prefer a visual of how a PPA works and all the parties involved? The image below (from the U.S. EPA) does a pretty good job (we think) of laying out the different entities and responsibilities involved.
We’ve been in the position of both the installer and solar services provider for a wide variety of projects. Our experience has given us a wealth of knowledge to draw from, which we are happy to share with organizations that are considering adding solar power to their facilities. If that’s you, we are here to help.
19 December 2008:
On the horizon, solar energy sees its day in the sun
But utilities, suppliers differ on renewable
Baltimore Business Journal – by Elizabeth Heubeck, Contributor
Recent state legislation requires solar energy to be a sliver of the renewable energy pie feeding Maryland’s electricity supply. But right now, not all utility companies and suppliers are biting.
Energy analysts’ dire warnings of a pending electricity shortfall – including the threat of rolling brownouts in the state as soon as 2011 – convinced Maryland legislators that solar energy needed to be part of the long-term solution. In response, the legislature last year revised Maryland’s Renewable Energy Portfolio Standard (RPS), mandating that a portion of electricity suppliers’ sales comes from solar. The incremental increase started with .005 percent this year, and by 2022 will reach 2 percent of the state’s electricity supplies – equivalent to approximately 1,500 megawatts. In addition, 18 percent of Maryland’s electricity supply will be fueled by other renewable sources.
Washington Gas Energy Services Inc. said Dec. 3 it will partner with two Maryland companies to build one of the state’s largest solar power systems to date. The 150-kilowatt system, which Washington Gas Energy Services (WGES) will own, will consist of just under 9,000 square feet of solar panels on the roof of John E. Kelly & Sons Electrical Construction in Prince George’s County. Gaithersburg-based Standard Solar Inc. will design, construct, operate and maintain the system.
read the full article at http://www.bizjournals.com/baltimore/stories/2008/12/22/focus1.html.
read the press release here (pdf)