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LCDR Leigh Hubbard III, PE, MS Albuquerque Service Unit - Albuquerque Area US Indian Health Service Slide 2 This presentation summarizes the preliminary results and conclusions of an Indian Health Service (IHS) photovoltaic project in the Pueblo of Zia, NM. The cost and economic feasibility information presented is particular to the regulatory, electrical utility, and solar vendor market conditions in the Albuquerque, New Mexico area. Conditions will vary nationally and with time. The conclusions and recommendations indicated are specific to the IHS Albuquerque Service Unit and reflect the mission of the Indian Health Service Sanitation Facilities Construction program. Disclaimer Slide 3 This presentation will cover the following topics: Photovoltaic Lift Station Project Introduction Local PV System Comparison Basic Electrical Terminology Basic PV System Configurations PV System Cost Incentives PV System Cost Savings PV System Benefit Analysis IHS Albuquerque Area Introduction Zia Photovoltaic System Slide 4 2010 ARRA Project to Replace a Failing Lift Station Slide 5 Introduction Zia Photovoltaic System 2010 ARRA Project to Replace a Failing Lift Station Slide 6 Solar Installation Goals: 1.Reduce Facility Electrical Costs 2.Engineer Familiarization with Technology for Use in Future Projects 3.Evaluate Level of Operation and Maintenance Required Introduction Zia Photovoltaic System Slide 7 Local PV System Comparison Slide 8 Comparison of the Zia project with other local solar project s in terms of: 1.Performance 2.Cost 3.System Payback Local PV System Comparison Slide 9 Owner UnitsIHSNM NG UNMNM VA Installation Type Fixed1-Axis2-AxisFixed PV System Size kWatt 1.811.272.0180.03,100.0 Capital Cost $ $16,704$210,000$776,000$850,000$20,000,000 Unit Cost $/watt $9.28$18.75$10.78$4.72$6.45 Approx. Specific Production kWh/kW/yr 2,110 1,700 Est Annual Power Cost Savings $ $414 $30,000 $0 System Not Reporting Yet Est Annual REC Credit Payment $ $190$45,900 Est Payback Period Years 283319 Est Cost Savings as of 2020 $ $5,734$285,000.0$436,050 Est 20-Year Cost Savings $ $10,077$600,000$436,050 Slide 10 Local PV System Comparison Slide 11 Basic Electrical Terminology Slide 12 100-Watt Light Bulb Slide 13 Basic Electrical Terminology 10 X 100 Watt Light Bulbs = 1,000 Watts 1,000 Watts = 1 Kilowatt or kW Slide 14 Basic Electrical Terminology 1 Kilowatt x 1 Hour = Kilowatt-hour or kWh Kilowatts x hours x (rate-per-kilowatt-hour) = Cost-to-Run Slide 15 Basic Electrical Terminology Solar Energy (in the form of photons) knock elections free from a silicon semiconductor material. Electrons are collected and directed toward a load as DC current. DC current is converted into AC current by an Inverter. AC current is the form of energy typically supplied to electrical utility customers. Slide 16 Basic PV System Configuration Slide 17 Three Installation Types. 1.Standard Electrical Installation 2.Photovoltaic Grid-Tied Installation 3.Photovoltaic Off-Grid Installation Basic PV System Configurations Slide 18 Pump Load Center GRID Standard Electrical Installation Slide 19 Basic PV System Configurations Pump Load Center GRID Solar PV Photovoltaic Grid-Tied Installation Slide 20 Basic PV System Configurations Pump Load Center Solar PV Photovoltaic Off-Grid Installation Slide 21 Basic PV System Configurations Fixed Array 1-Axis Tracking Array 2-Axis Tracking Array Slide 22 PV System Cost Incentives Slide 23 30% Federal Tax Credit 10% State Tax Credit (New Mexico up to $9,000 max) Net Metering (Electricity from PVs Return to Grid) Renewable Energy Certificates RECs (Mandated Payment from Electrical Utility) PV System Cost Incentives Slide 24 30% Federal Tax Credit 10% State Tax Credit (New Mexico up to $9,000 max) Residential and Commercial Installations Only PV System Tax Credits Slide 25 If pull more electricity from grid than generated by PV system, you are billed for the net energy supplied. If PV system generates more electricity than pulled from grid, net kWh generated are credited on the next bill. Unused credits are carried forward from month to month. When the value of the unused credits exceeds $50, payment is made to the customer the following month. Net Metering Slide 26 Renewable Energy Certificates - RECs Thirty-three States and DC have established Renewable Portfolio Standards (RPS) that create market demand for renewable and clean energy supplies. RPS requirements mandate that 4% to 30% of electricity be generated from renewable sources. RECs are one method to comply with RPS. http://www.epa.gov/chp/state-policy/renewable_fs.html Slide 27 States offer a variety of financial incentives that can include: Corporate Tax Credits Performance-based incentives Personal tax credits Property tax incentives Sales tax incentives State bond programs State loan programs Utility rebate programs http://www.dsireusa.org/incentives/index.cfm?getRE=1?re=undefined&ee=1&spv=0&st=0&srp=1&state=NM State Incentive Summary Slide 28 PV System Cost Savings Slide 29 Slide 30 Slide 31 Facility Cost Savings Electrical Utility Production Capacity Owner Purchase Date Geographic Location PV System Cost Savings Slide 32 Electrical Utilities : May not participate in renewable energy programs. May be contracted to purchase from power generators. May have a later deadline to purchase RECs. May satisfy RPS targets early and no longer purchase RECs. May not agree to purchase excess net energy from PV systems. Electrical Utility Slide 33 Large electrical demands require a utility to maintain capacity within the system. Utility re-coup expense with minimum rate-per-kilowatt-hour. GW Well - existing rate $0.14 / kWh. Savings strategy to install a grid-tied system to off-set overall kWh used. But, utility charges a minimum capacity rate of $0.09 / kWh. Actual savings is only $0.05 /kWh. Production Capacity Slide 34 Residential and Commercial system owners receive federal and state tax credits. Residential and Commercial system owners are eligible to receive net- metering and RECs. Federal projects do not receive tax credits. Federal agencies do not receive REC payments. Tribal Governments do not pay taxes and do not benefit from tax credits. Owner Slide 35 States have different Renewable Portfolio Standard (RPS) targets (% of electricity sales). The NM target is 20% for Investor Owned Utilities and 10% for Rural Utilities. States have different implementation deadlines. NM target date is 2020. Utility payment rates to owners are organized into tiers. As a tier is filled, the next available tier offers a lower REC payment rate. Once all ties are filled, the Utility stops purchasing RECs. Contracts for REC payments terminate after the deadline. The first systems to be commissioned receive the highest return for a longer time period. Purchase Date Slide 36 Geographic Location http://www.nrel.gov/gis/solar.html Slide 37 System cost and savings depend on many factors, many of which are time and location dependent. In our experience the easiest method to calculate the system cost was to contact local commercial vendors. Benefits: Familiar with local markets and product manufacturers. Capable of calculating system size to best benefit from market conditions. Capable of calculating construction cost and applicable incentives, credits, and rebates. Usually have in-house construction capability. May have GSA contracts that facilitate the federal procurement process. PV System Cost Savings Slide 38 PV System Benefit Analysis Slide 39 Owner UnitsIHSNM NG UNMNM VAVendor 1Vendor 2Vendor 3 Installation Type Fixed1-Axis2-AxisFixed PV System Size kWatt 1.811.272.0180.03,100.01.62.352.04.01.84.0 Capital Cost $ $16,704$210,000$776,000$850,000$20,000,000$8,855$11,162$16,000$24,000$9,900$16,000 Unit Cost $/watt $9.28$18.75$10.78$4.72$6.45$5.50$4.75$8-10$6-8$5.50$4.00 Approx. Specific Production kWh/kW/yr 2,110 1,700 1,4111,7761,850 Est Annual Power Cost Savings $ $414 $30,000 $0 System Not Reporting Yet $431$623$400$800 Est Annual REC Credit Payment $ $190$45,900$114$209$185$370 Est Payback Period Years 283319 16132721 Est Cost Savings as of 2020 $ $5,734$285,000.0$436,050 $5,178$7,904$5,558$11,115 Est 20-Year Cost Savings $ $10,077$600,000$436,050 $9,707$14,449$9,758$19,515 Slide 40 PV System Benefit Analysis Unit Cost - $4.00/watt to $18.75/watt Payback Period - 13 to 33 years Owner UnitsIHSNM NG UNMNM VAVendor 1Vendor 2Vendor 3 Installation Type Fixed1-Axis2-AxisFixed PV System Size kWatt 1.811.272.0180.03,100.01.62.352.04.01.84.0 Capital Cost $ $16,704$210,000$776,000$850,000$20,000,000$8,855$11,162$16,000$24,000$9,900$16,000 Unit Cost $/watt $9.28$18.75$10.78$4.72$6.45$5.50$4.75$8-10$6-8$5.50$4.00 Approx. Specific Production kWh/kW/yr 2,110 1,700 1,4111,7761,850 Est Annual Power Cost Savings $ $414 $30,000 $0 System Not Reporting Yet $431$623$400$800 Est Annual REC Credit Payment $ $190$45,900$114$209$185$370 Est Payback Period Years 283319 16132721 Est Cost Savings as of 2020 $ $5,734$285,000.0$436,050 $5,178$7,904$5,558$11,115 Est 20-Year Cost Savings $ $10,077$600,000$436,050 $9,707$14,449$9,758$19,515 Slide 41 PV System Benefit Analysis Upfront Owner System Expense and Payback Period are Eliminated Payback is Immediate Owner UnitsIHSNM NG UNMNM VAVendor 1Vendor 2Vendor 3 Installation Type Fixed1-Axis2-AxisFixed PV System Size kWatt 1.811.272.0180.03,100.01.62.352.04.01.84.0 Capital Cost $ $16,704$210,000$776,000$850,000$20,000,000$8,855$11,162$16,000$24,000$9,900$16,000 Unit Cost $/watt $9.28$18.75$10.78$4.72$6.45$5.50$4.75$8-10$6-8$5.50$4.00 Approx. Specific Production kWh/kW/yr 2,110 1,700 1,4111,7761,850 Est Annual Power Cost Savings $ $414 $30,000 $0 System Not Reporting Yet $431$623$400$800 Est Annual REC Credit Payment $ $190$45,900$114$209$185$370 Est Payback Period Years 283319 16132721 Est Cost Savings as of 2020 $ $5,734$285,000.0$436,050 $5,178$7,904$5,558$11,115 Est 20-Year Cost Savings $ $10,077$600,000$436,050 $9,707$14,449$9,758$19,515 $16,407 Capital Cost is 3.5% of Project Funding Slide 42 Sustainability To promote and assist in the establishment of an effective and economical mechanism for the operation and maintenance of tribal water, sewage, and solid waste systems. IHS Operation and Maintenance Guideline for the SFC program, Working Draft, January 2009 PV System Benefit Analysis Slide 43 Sudan war mirrors region's oil conflicts The brewing war between Sudan and South Sudan is a battle for oil and there are other such potential conflicts in the Middle East and Africa. http://www.upi.com/Business_News/Energy-Resources/2012/04/18/Sudan-war-mirrors-regions-oil-conflicts/UPI-68621334766985/#ixzz1xiyeA8vS South China Sea Oil Rush Risks Clashes as U.S. Emboldens Vietnam on Claims Vietnam and the Philippines are pushing forward oil and gas exploration projects in areas of the South China Sea claimed by China, sparking a fresh clash in one of the worlds busiest shipping corridors. China http://www.bloomberg.com/news/2011-05-26/s-china-sea-oil-rush-risks-clashes-as-u-s-emboldens-vietnam.html Egypt Cancels the Delivery of Gas to Israel EgyptEgypts state-owned natural gas company said Sunday that it was ending a deal to ship gas to Israel because of a payment dispute.natural gasIsrael http://www.nytimes.com/2012/04/23/world/middleeast/egypt-cancels-delivery-of-natural-gas-to-israel.html?_r=1 PV System Benefit Analysis Slide 44 Argentina Seizes Repsol's Assets In Worrying Signal To Exploration Firms The governments seizure of Spanish giant Repsols assets in Argentina could slow foreign investments in the countrys shale reserves. http://www.upi.com/Business_News/Energy-Resources/2012/04/18/Sudan-war-mirrors-regions-oil-conflicts/UPI-68621334766985/#ixzz1xiyeA8vS Argentina reignites conflict over Falklands oil Argentina's demand for direct control of shipping from the South American mainland to the Falkland Islands has raised fears about conflict over energy resources in the south Atlantic. http://www.azcentral.com/news/articles/2010/02/18/20100218falklands0218.html#ixzz1xj23KsZX. http://www.azcentral.com/news/articles/2010/02/18/20100218falklands0218.html#ixzz1xj23KsZX U.S. Sends Top Iranian Leader a Warning on Strait Threat Senior Obama administration officials have said publicly that Iran would cross a red line if it made good on recent threats to close the strait, a strategically crucial waterway connecting the Persian Gulf to the Gulf of Oman, where 16 million barrels of oil about a fifth of the worlds daily oil trade flow through every day http://www.nytimes.com/2012/01/13/world/middleeast/us-warns-top-iran-leader-not-to-shut-strait-of-hormuz.html?pagewanted=all PV System Benefit Analysis Slide 45 Estimated 20-Year Cost Savings = $10,077 @ $0.135 kWh Owner UnitsIHSNM NG UNMNM VAVendor 1Vendor 2Vendor 3 Installation Type Fixed1-Axis2-AxisFixed PV System Size kWatt 1.811.272.0180.03,100.01.62.352.04.01.84.0 Capital Cost $ $16,704$210,000$776,000$850,000$20,000,000$8,855$11,162$16,000$24,000$9,900$16,000 Unit Cost $/watt $9.28$18.75$10.78$4.72$6.45$5.50$4.75$8-10$6-8$5.50$4.00 Approx. Specific Production kWh/kW/yr 2,110 1,700 1,4111,7761,850 Est Annual Power Cost Savings $ $414 $30,000 $0 System Not Reporting Yet $431$623$400$800 Est Annual REC Credit Payment $ $190$45,900$114$209$185$370 Est Payback Period Years 283319 16132721 Est Cost Savings as of 2020 $ $5,734$285,000.0$436,050 $5,178$7,904$5,558$11,115 Est 20-Year Cost Savings $ $10,077$600,000$436,050 $9,707$14,449$9,758$19,515 Slide 46 PV System Benefit Analysis Estimated 20-Year Cost Savings = $18,350 @ $0.27 kWh Estimated 20-Year Cost Savings = $34,895 @ $0.54 kWh Owner UnitsIHSNM NG UNMNM VAVendor 1Vendor 2Vendor 3 Installation Type Fixed1-Axis2-AxisFixed PV System Size kWatt 1.811.272.0180.03,100.01.62.352.04.01.84.0 Capital Cost $ $16,704$210,000$776,000$850,000$20,000,000$8,855$11,162$16,000$24,000$9,900$16,000 Unit Cost $/watt $9.28$18.75$10.78$4.72$6.45$5.50$4.75$8-10$6-8$5.50$4.00 Approx. Specific Production kWh/kW/yr 2,110 1,700 1,4111,7761,850 Est Annual Power Cost Savings $ $414 $30,000 $0 System Not Reporting Yet $431$623$400$800 Est Annual REC Credit Payment $ $190$45,900$114$209$185$370 Est Payback Period Years 283319 16132721 Est Cost Savings as of 2020 $ $5,734$285,000.0$436,050 $5,178$7,904$5,558$11,115 Est 20-Year Cost Savings $ $10,077$600,000$436,050 $9,707$14,449$9,758$19,515 Slide 47 PV System Benefit Analysis Lower Unit Costs - Reduce Upfront Costs Lower Unit Costs - Reduce Payback Period Owner UnitsIHSNM NG UNMNM VAVendor 1Vendor 2Vendor 3 Installation Type Fixed1-Axis2-AxisFixed PV System Size kWatt 1.811.272.0180.03,100.01.62.352.04.01.84.0 Capital Cost $ $16,704$210,000$776,000$850,000$20,000,000$8,855$11,162$16,000$24,000$9,900$16,000 Unit Cost $/watt $9.28$18.75$10.78$4.72$6.45$5.50$4.75$8-10$6-8$5.50$4.00 Approx. Specific Production kWh/kW/yr 2,110 1,700 1,4111,7761,850 Est Annual Power Cost Savings $ $414 $30,000 $0 System Not Reporting Yet $431$623$400$800 Est Annual REC Credit Payment $ $190$45,900$114$209$185$370 Est Payback Period Years 283319 16132721 Est Cost Savings as of 2020 $ $5,734$285,000.0$436,050 $5,178$7,904$5,558$11,115 Est 20-Year Cost Savings $ $10,077$600,000$436,050 $9,707$14,449$9,758$19,515 Slide 48 Cons: High Initial Cost Long Pay Back Period Complicated Technology Incentive Programs REC Payment Process are Confusing Paying for Prime Contractor Markup on Sub-Contractor Work PV System Benefit Analysis Slide 49 Pros: Lower Unit Costs Available with a Potential for GSA Pricing Offsets Power Used Owner Will Not Feel Future Rate Increases Improves Tribal System Sustainability Frees Funds For Other Uses Lowers Carbon Footprint of Tribal System and Reduces Pollution Fixed PV Arrays Are Stand-Alone and Low Maintenance Vendors Offer Comprehensive Range of Services and PV Packages PV System Benefit Analysis Slide 50 Result: Albuquerque Service Unit will be attempting to incorporate PV grid-tied systems in future sanitation facility projects. The long term goal will be to overtime offset the daily power consumption of tribal sanitation facilities below a threshold power demand to be determined. Eventually, all facilities will be converted and the funds expended on power consumption can be dedicated to other beneficial uses. PV System Benefit Analysis Slide 51 Questions?