Entities that sign SSAs are in effect changing utilities from one that is regulated to another that is subject to go out of business and not responsible to anyone but increasing shareholder value.  The authors cite “an innovative approach to solar energy that benefits private and public entities alike.”  This is untrue; this approach allows private firms to fly under the regulatory framework protecting its citizens.  The article will not specifically cite the potential savings for tax-exempt entities, which would seem natural with the statement, “The escalating and constantly gyrating costs of energy can play havoc with a school district’s budget.”  What are the savings?

I am a solar energy expert in Arizona and consul my clients to purchase these systems with either a bank loan or outright cash if it is available.  The fundamental reason behind my reasoning is that the savings from a SSA is only a fraction of the real savings available from making the investment in an entity’s long-term economic sustainability.  In the best case for an SSA agreement over 25 years, the cost of electricity will decrease between 10%-20% from what the utility charges.  In the best case for the purchase of a solar energy asset, electricity will be free for every kWh generated for at least 2 decades.  The ultimate problem with SSAs is that the devil lies in the details; it is certain that the SSA firm is not responsible for many things that the state’s utilities are mandated to provide.  What is the likelihood of a utility going out of business?  What is the likelihood of a company with investors to make fundamental mistakes and cease operation?  From the current events, it is evident that not one utility went out of business and thousands (even ones too big to fail) went out of business or required government bailout money.

In this example of a 300 kW power plant, the following facts are evident:

1. The current cost per kWh is $0.075 and escalating at 6.5% per year.
2. The SSA starts out at $0.90 per kWh and escalates at 2% per year.
3. The system breaks even in 4 years with current energy costs or SSA costs.

Interestingly enough, the authors cite “The likely effect would be to send the firms packing to other states that do not regulate them like utilities.”  So, in effect, if these companies cannot make an easy score in Arizona, they will move to other places like California, Utah, Colorado, or others.  I do not believe anyone in Arizona is unhappy that Enron did not like Arizona’s regulatory environment and passed on the state as a fruitful candidate for its corporate efforts.

There are many examples of viable public and private partnerships that result in truly magnanimous projects.  However, the SSA will not provide Arizona schools with a truly beneficial relationship.  Here are the facts why SSA companies are in Arizona:

1. Arizona Schools have been hit hard with budget cuts and are looking for any ways to trim the budget if even by only tenths of a percent.
2. Arizona’s two major metropolitan areas receive more sun per day than any other metropolises in the US…this ensures the private companies will be able to mint money
3. Arizona currently does not regulate SSA firms, which is an opportunity for these companies given many other states are proposing to regulate these companies like utilities.
4. Arizona has some of the best solar energy incentives in the country.

These are the reasons the Arizona Corporation Commission should not give a pass to SSA companies:

1. Schools are susceptible to signing agreements that may make sense for small savings today but forgo the larger savings available with a better plan.
2. There are much better plans for schools to save money with solar energy assets that are realized with a true private partnership with public schools…benefactors step up.
3. Burdensome regulation protects Arizona consumers…Arizona’s past is full of many examples when private firms lobbied public regulatory agencies for a pass, and Arizona ended up holding the foul-smelling bag.
4. The likelihood that the head of the Sierra Club and Goldwater Institute see eye to eye without an outside lobbying effort is unfathomable.  The Goldwater Institute recently sued the ACC to prevent it from instituting renewable energy guidelines for the state.

The authors do point out something very important, that fact is that Arizona utilities are on pace to fail their renewable energy mandates by a significant amount.  In effect, AZ utilities have done a great job at confusing their renewable energy incentive programs by allowing phantom projects to soak up the majority of available money, which prevents signed contracts from moving forward with truly interested enterprises wanting to make the long-term investment.  I can drown the reader in facts with public documents filed at the ACC, and if you would like to know more, please read.

Date of Release: Sept 9th, 2009

“Energy Company Conserves Energy”

Union Distributing is proud to announce that it (in conjunction with Solar Hawk EnergyTM) will install two solar energy power plants at Union Distributing’s petroleum bulk plant facilities in Phoenix and Tucson (163 kW and 90 kW respectively). This will be the third largest, privately-owned solar energy installation in Arizona. Union’s $1,600,000+ dollar purchase of the highest-efficiency, monocrystalline, photovoltaic solar energy system will reduce Union Distributing’s electricity costs by approximately 85% in Phoenix, and 90% in Tucson.

Union’s solar energy systems will produce approximately 400,000 kilowatt hours per year. The benefits from the solar energy production to both the Arizona environment and the health of Arizonans are substantial. The solar energy produced annually will prevent the release of up to 800,000lbs of carbon dioxide emissions that would have ordinarily contaminated the air we breathe and littered the Arizona skyline.

Union’s solar energy system will also preserve annually approximately 200,000 gallons of water that would have formerly been needed and withdrawn from Arizona’s dwindling watersheds that currently provide the much needed fresh water run-off into Arizona’s parched rivers and lakes.

Union Distributing is among Arizona’s largest privately owned distributors of petroleum products including gasolines, diesel fuels, and motor oils. Union Distributing has supplied these products statewide since its founding in 1986. The company’s owners, David and Warren Lueth see solar energy as one means to be ‘ahead of the curve’ in today’s competitive environment. These projects, along with its use of hybrid vehicles in its sales fleet, demonstrate that Union Distributing is committed to Arizona’s long-term economic and environmental health.

SRP (Salt River Project), TEP (Tucson Electric Power), Federal, and Arizona tax incentives ensure that Union Distributing has an attractive ROI (Return on Investment) by shouldering 67-85% of the incurred expenses and in addition, Union hedges against 85-90% of future expenses caused by imminent electricity rate hikes for the next 25 – 40 years.

Union Owners, Dave and Warren Lueth noted:

“After careful consideration of the financial analysis provided by Solar Hawk EnergyTM, we decided that moving forward with this project is a sound business decision. Arizona is our home. Arizonans are our clients, our neighbors, and our friends, and this project is needed for the environment, helpful for our economy, supports our profitability, and it just made overall practical sense.”

About Union Distributing Company:

Founded in 1986 by brothers David and Warren Lueth, the company began operations in Tucson, supplying Union 76 fuels and lubricants. In 1990, the company constructed a new modern bulk plant, general offices, and cardlock in an industrial business park in Tucson. In 1993, Union Distributing opened up operations in Phoenix and, in 1998, they moved into their state of the art new bulk plant, warehouse, and general offices on the west side of Phoenix in the Freeport Center. The company employs eighty team members and operates a fleet of delivery vehicles from its Tucson and Phoenix plants. In 2008, Union Distributing was recognized by the sponsors of the ACE (Arizona Corporate Excellence) Awards as the 10th top privately held company by revenue in Arizona.

Click to Download

]]> http://solarhawkenergy.com/press/union-distributing-press-release/feed 0 http://solarhawkenergy.com/blog/regarding-the-acc-decision-71254 http://solarhawkenergy.com/blog/regarding-the-acc-decision-71254#comments Tue, 29 Sep 2009 05:30:05 +0000 Charles http://solarhawkenergy.com/blog/?p=282

Download ACC Decision 71254

Solar Hawk Energy™ believes that the current decision has several errors of fact according to the data cited in this decision. The Company also believes that the Arizona Corporation Commission should add amendments to its decision 71254 to remedy these errors and to ensure a fair playing field for all companies (ratepayers) that are ultimately responsible for paying the APS Environmental Surcharge that funds the Arizona Renewable Energy Standard and Tariff.

1. Page 2, Lines 3-5, Findings of Fact #5.

a. “APS asserts that the increase in the cost recovery guarantee will not have any impact on the bills of APS’ customers in 2009.”

i. This is probably true, but what is the expected increase to ensure the recovery guarantee does not have a negative impact on APS’ operations in 2010 and beyond? Meaning, the money must come from somewhere and must ultimately be paid by APS customers.

2. Table on Page 2, Lines 6-13, Findings of Fact #6

(Click to Enlarge)

a. Other relevant numbers in order to complete the math behind these numbers are:

i. APS has a current cap of $77 million (Page 2, lines 15-16)

ii. “this analysis projects a total of 48.1 MegaWattts (“MW”) of new PBI projects that could receive APS commitments by the end of 2009, if the Commission approves the new $220 million recovery guarantee” Page 8, Lines 2-5

iii. “a total of 84,271,200 kWh will be produced each year form the new projects” Page 8, Line 7.

3. $148 Million of projects (67.3% of all money requested) is determined in the footnotes

a. New reservations through the April 30, 2008 nomination period (25%)

b. APS has been involved in detailed project discussions with customers and developers (28.6%)

c. Forecasted based on informational inquiries from customers or developers (13.6%)

i. Thus, the entirety of the APS renewable energy funds are spoken for with tentative projects (“Phantom Projects”) that prevent other APS’ ratepayers from purchasing solar energy assets for their facilities…this table insinuates that only 83-98 APS ratepayers will receive money for solar energy assets! This is not the intent of the commercial program anymore than it is for the residential program. The ethos of the REST by setting aside 30% of all REST funds for Distributed Energy projects is that this will help APS customers in the long-term by purchasing solar energy assets to offset their long-term energy costs and increase these companies’ long-term competiveness as Arizona-based companies.

Let’s Do the Math

A. In order to reach the Lifetime Contract Commitment level requested by APS and given the fact cited above for annual kWh production (84,271,200) and APS’ maximum PBI payment is $0.25 per kWh, then the math follows 84,271,200 x $0.25 x 10 years = $210,678,000, which is below $220,000,000!

a) Thus, APS is paying more than its maximum incentive of $0.25 per kWh for 10 years.

b) This shows APS is in fact paying an average of $.261 per kWh over 10 years!

B. If APS’ figures for annual kWh production (84,271,200) for its proposed total MW installed capacity (48.1 MW), then the annual output per year must be 1,752 kWh/kW per year.

a) HOWEVER, 84,271,200 kWh paid at an APS maximum incentive of $0.25 per kWh for 10 years is an easy calculation. At $0.25 per kWh for 84,271,200 kWh per year for 10 years is $210,678,000, which is $9.32 million less than ACC granted APS for commercial projects.

b) The ‘Annual Incentive Impact’ of $16,000,000 averages into $220,000,000 at a rate of $0.1898 per kWh produced per year for 13.75 years

1. Thus, APS is paying a larger percentage of these projects than even its greatest incentive level indicates…yet APS believes that in the future the Company must decrease this incentive level to allow more projects to compete for reservation monies.

2. This has not been proven with the facts presented in this decision!

C. If the 2009 cap is $77 million and APS cannot grant any other reservations given that the next project in the reservation queue assumes more than $5 million more than the current “projects [that] have been accepted and/or completed”, then this project size would need to be at least $0.25 x 10 years x 1200 kW x 1752 kWh/kW!

a) Thus, a 1.2 MW project keeps smaller, shovel-ready jobs from going forward in this current year even if the ACC did not grant APS the additional funds. Additionally, APS contends that no other projects can be funded given the new allocation of $148 million more money for projects! This destroys the commercial solar energy market in Arizona for solar energy developers!

D. If APS contends that all the projects cited in this table prevent further reservations from being granted, then this REST program should change. APS cites “5-10” or “5-15” as the number of projects assuming $93 million are ‘In Development’ and ‘Anticipated Based on Inquiries’ ($93 million is 62.83% of the new $148 million allocation approved by the ACC Decision 71254). The rest of the new allocation is slated for projects ‘Received and Pending’, which also seems misleading given no announcement in the state’s public papers of the clients who signed these large contracts for systems averaging 800 kW DC.

a) This kind of uncertainty should not be allowed by the ACC!

Other Findings Worthy of Investigation

1. Page 2, Lines 22-25 and Page 3, Lines 1-3: APS claims, “there is increased interest in PBI reservation requests from schools at the same time that residential distributed project interest is lagging.” MOREOVER, “APS proposes that school projects be classified as residential distributed energy projects, which would allow schools to receive up-front incentives [UFI] paid by REST funding that had been allocated for residential projects.”

a. In the space of 7 lines, APS contradicts its claims by stating that schools want PBI payments and then gives the schools UFI payments…why is this allowed?

b. Schools are not purchasing the solar energy plants directly, rather AZ schools are employing solar energy developers who offer PPAs (Power Purchase Agreements), which are popular with energy users that cannot use the US Federal Incentives (30% Tax Credit and Accelerated Depreciation)

c. It also disturbing that the ACC would grant this request to take place in the next four months in 2009.

i. Thus, this is a very flawed understanding of what schools want, who is ultimately benefiting from the UFI vs. PBI determination, and very misleading for every solar energy developer in Arizona but the one company that has lobbied APS to include this specific caveat in the ACC paperwork.

ii. The short time frame gives no notice to other commercial-scale solar energy developers to use the UFI benefit to sell solar energy assets to the broader commercial sector in Arizona.

2. Page 3, Line 14: APS believed that “$77 million cap would be sufficient for systems in 2009”

a. How did APS so significantly underestimate the solar energy market potential; this is a grave miscalculation and demonstrates that APS is not requesting input from the solar energy companies in Arizona or something else really needs some explaining? IF APS miscalculated the energy demands for its customers with a similar estimation, then Arizona could rest assured there would be consistent rolling blackouts throughout the state.

3. Page 5, Lines 3-5: Staff believes “a total of 48.1 MegaWatts (“MW”) of new PBI projects could receive APS commitments by the end of 2009”

a. Solar Hawk Energy™ does not believe this is true…has the ACC Staff taken APS word on this as fact or has the Staff actually reviewed all of these proposed projects, which Solar Hawk Energy™ believes are mostly “Phantom Projects” obfuscating the entire renewable energy incentive program for commercial-scale solar plants.

4. Page 7, Lines 12-17: Staff believes “solar developers see the APS PV PBI incentive of 18-25 cents/kWh as a profit bonanza while the incentives are still high”

a. There is no bonanza of projects being installed in Arizona during 2009, which means that all these projects are slated for 2010…but is this really truth or fiction?

b. Solar Hawk Energy™ believes that APS has “Phantom Projects” assuming all of the REST monies as a means to prevent solar energy developers from going forward with shovel-ready projects by seemingly allocating all the available monies for 2 years or more. Will APS actually realize $72 million of projects with PBI payments in 2009? That would mean APS realizes an installed capacity of more than 16 MW of solar energy this year alone…

i. 10 years x 16 MW x 1,752 kWh/year/kW x $0.25 = $70.08 million.

Solar Hawk Energy™ Conclusions:

1. APS has not been forthcoming enough to the ACC Staff in order to prove its data.

2. APS has obscured the UFI and PBI differentiation for the benefit of an insider lobbying effort to do so. It is unclear who is ultimately benefiting from this arrangement, but it certainly is NOT the Arizona solar energy industry or Arizona businesses aka APS ratepayers.

3. The ACC needs to revisit the APS REST implementation plan to ensure that ratepayers will be able to receive REST monies to install solar energy systems at more locations than the 83-98 cited.

a. As a matter of fact, a 200 kW solar energy system receiving a $0.25 PBI for 10 years will cost at most $800,000 and produce 1.6 million kWh over 10 years with an average output of 1600 kWh per kW DC installed.

b. A 200 kW solar energy system is the typical size of even large operations with average annual bills around $35,000. Most rooftops cannot handle more solar energy than this.

c. APS projects, in its table cited on Page 2, that the average sizes of the projects in its pipeline are at least 1.1 MW per client. This is not the intent of the REST program to reward a few companies while leaving the majority of the ratepayers bereft of the ability to afford clean, green, renewable energy that will ultimately help their operations save money in the coming decades.

i. THUS, Solar Hawk Energy™ believes a cap of 500kW should be placed on all APS projects for a client in a given year…even if that client has multiple stores, factories, or buildings…the point is to distribute the energy funds and not lock all the money into a few projects benefiting only a modicum of APS ratepayers.

ii. Any project over 500kW should be considered a utility-scale project and paid as such from the REST funds allocated to this utility-scale sector. 70% of all REST money is for APS’ utility-scale renewable energy power plants and/or to buy Renewable Energy Credits (RECs) on the open market.

4. APS should adopt a system like SRP’s published PBI program (www.srpnet.com). This is a fair system with central features that benefit SRP ratepayers who decide to go solar. SRP ratepayers are ultimately affected by the SRP’s Environmental Surcharge costs, which really is the same as the REST.

a. Every kWh produced is considered a kWh not charged to the customer. The value is for a full kWh and not a percentage of its cost to the ratepayer, as APS indicates is the case for buyers of solar energy systems. APS proposes it should recognize only 60%-70% of the actual cost of a kWh sold to its ratepayers as offset with a kWh produced by the distributed energy power plant.

b. The cap on the system size is 300 kW DC, which is a very large system for a significant energy user. This size prevents gaming of the system with “Phantom Projects” or just a few energy users to assume an overwhelming majority of SRP’s renewable energy fund.

c. A first-come, first-serve strategy is imposed on all interested companies requesting funding for solar energy systems. This means that a signed contract will be funded immediately and not put on hold because a “Phantom Project” is blocking the queue.

i. THUS, Solar Hawk Energy™ believes that the auction system may be fine for utility-scale projects, but this strategy only serves to circumvent commercial-scale solar energy plants that are valid, shovel-ready projects from going forward. No customer of Solar Hawk Energy™ wants to wait in an innuendo for months in order to know if its project is fundable at the published incentive rates on the APS website.

ii. APS and the ACC should be able to make better projections than they have done in the past to ensure the REST is met and the process is not muddied with an auction process that really only serves to tie up funds for the largest of projects with the largest economies-of-scale. This is not the intent of the REST as originally conceived with input from the solar energy community, which the owner and CEO of Solar Hawk Energy™, Charles Provine, actively participated in years ago.

iii. Solar Hawk Energy™ and other firms received very troubling information from APS at a meeting for solar energy developers on August 18, 2009. The APS representative explained that APS would institute a 6-month waiting period in 2010 between funding rounds for commercial-scale projects in order to ensure ratepayers got the most renewable energy for the best price. THIS is flawed, because it has not worked in the past with APS actually granting more than its maximum payout ($0.25 per kWh for 10 years). THIS is also unfair to APS ratepayers who want a modest 100kW or 200kW solar power plant to effectively negate their current electric bills. Solar Hawk Energy™ has contacted many such companies that are interested, but unwilling to take the risk that APS will not fund their valid, shovel-ready projects and continue to secure their reservations in a holding pattern without hope for funding at an appropriate level stated in all ACC and APS documentation as to the published incentive rates!

5. How can the table on Page 2 be the total amount of data shared by APS? Should not the ACC Staff be privy to information that is more detailed in order to make this case than the obviously flawed data table on Page 2?

Download SHE Analysis

]]> http://solarhawkenergy.com/blog/regarding-the-acc-decision-71254/feed 0 http://solarhawkenergy.com/news/usa-today http://solarhawkenergy.com/news/usa-today#comments Tue, 29 Sep 2009 04:23:57 +0000 Charles http://solarhawkenergy.com/blog/?p=239 “Union Distributing Co. will add nearly 250 kilowatts of solar power to its facilities in Phoenix and Tucson as it looks to cover most if not all of its energy use. The company will spend about $1.6 million with Solar Hawk Energy, a Scottsdale-based Solar Energy Firm…”

Click to Download the Articles

]]> http://solarhawkenergy.com/news/usa-today/feed 0 http://solarhawkenergy.com/projects/union-distributing-tucson http://solarhawkenergy.com/projects/union-distributing-tucson#comments Tue, 29 Sep 2009 04:12:20 +0000 Charles http://solarhawkenergy.com/blog/?p=228

Union Distributing Tucson (Click to Make Larger)

• 253 kW total installed photovoltaic capacity at two locations.
• $36,000 annual savings in electricity costs year 1, $46,000 year 5!
• $1.6 million in total.
• Year 6 break-even with Federal, State, and utility incentives.
• Non-Penetrating roof Integrated photovoltaic modules (less than 3lbs/ft2).
• 85% of total electricity costs avoided each year with no other upgrades.
• 25-year warranty on modules and 10-year warranty on inverter.
• Outright purchase of system rather than changing utilities with a Power Purchase Agreement (PPA).
• Completed by October 31, 2009.
• Arizona firm responsible for all work.
• Solar Hawk Energy is the Project Developer.

Click to Download the Spec Sheet

]]> http://solarhawkenergy.com/projects/union-distributing-tucson/feed 0 http://solarhawkenergy.com/projects/union-distributing-phoenix http://solarhawkenergy.com/projects/union-distributing-phoenix#comments Tue, 29 Sep 2009 03:25:00 +0000 Charles http://solarhawkenergy.com/blog/?p=196

Union Distributing Phoenix (Click to Make Larger)

1. 253 kW total installed photovoltaic capacity at two locations.
2. $36,000 annual savings in electricity costs year 1, $46,000 year 5!
3. $1.6 million in total.
4. Year 6 break-even with Federal, State, and utility incentives.
5. Non-Penetrating roof Integrated photovoltaic modules (less than 3lbs/ft2).
6. 85% of total electricity costs avoided each year with no other upgrades.
7. 25-year warranty on modules and 10-year warranty on inverter.
8. Outright purchase of system rather than changing utilities with a Power Purchase Agreement (PPA).
9. Completed by October 31, 2009.
10. Arizona firm responsible for all work.
11. Solar Hawk Energy is the Project Developer.

Click to Download the Spec Sheet

]]> http://solarhawkenergy.com/projects/union-distributing-phoenix/feed 0 http://solarhawkenergy.com/blog/power-purchase-agreements-vs-purchasing http://solarhawkenergy.com/blog/power-purchase-agreements-vs-purchasing#comments Tue, 29 Sep 2009 03:16:43 +0000 Charles http://solarhawkenergy.com/blog/?p=193 The Power Purchase Agreement (PPA) is not advantageous for companies.  The PPA is a wise legal contract for utilities to use as their tried-and-proven mechanism to buy energy from merchant plants during peak periods for their customers’ power demands. When utilities need more power, the mostly deregulated utilities’ industry uses the PPA to develop new generation assets owned by third party energy developers.  These third-party facilities are referred to as merchant plants.   However, the PPA is a poor choice for renewable energy projects of 10 megawatts or less that distribute this power to one or a few facilities.   This is always the case with solar energy technology owned and operated by its user(s).  This can also be the case with some Residential Real Estate Development.

With a PPA, the facility owner effectively switches its utility company by paying a steady rate of return acceptable even by Wall Street standards.  This sounds like selling energy to customers is a very profitable proposition, which it obviously is!  PPA agreements are not a wise investment for distributed energy assets.  PPAs are for merchant power plants.

Let Solar Hawk Energy™ show you how significantly the Opportunity Cost varies in the tens of thousands between a PPA and normal utility rates over 25 years. Then, let Solar Hawk Energy™ show you the real measure of Opportunity Cost is in the millions of dollars and has at least a 25% Internal Rate of Return.*

*For Arizona companies*

Keep it transparent for all companies to ensure confidence in the incentives for solar energy investments.

It is easy to navigate the process to ensure ‘shovel-ready’ jobs are prioritized above all others.

Simple to allow the ‘shovel-ready’ demand to earn the maximum allotted incentives without the limitations imposed by earmarks or reservations that effectively skew the current process.

And

Straightforward is the best framework; the ACC should require its regulated utilities to abide by this principle and thus effectively bypass the confusion evidenced by the current situation in Arizona and with the derailing of the California solar energy market.

The Problem:

Companies paying for Arizona-generated electricity should not be turned away because some integrators ‘game’ the REST Program.

Currently TEP and APS are VERY oversubscribed for their renewable energy budgets, but where are the solar energy assets being installed? It is difficult to believe that there are so many reservations for projects with no hope of taking off and being implemented. Additionally, it is difficult to believe that a handful of firms can effectively reserve the total available renewable energy funds for distributed energy projects. These regulated utilities will see the same companies frequently failing the reservation process as these integrators try to push clients into a sale without having done the necessary due diligence.

If so many of these projects are valid, why haven’t the news organizations been covering the explosion of solar in Arizona? The solar energy sector is being gamed by some companies with a strategy to choke the other solar energy providers by making the incentive money seemingly unavailable. If APS and other utilities realized 50% of its current reservations, then it would make AZ the largest solar energy player in the country in 2009….something that is out of reach and not realistic with this flawed system.

Solar Hawk Energy™ Suggestions:

1. Make the reservation period limited to 30 days without a 10% down signed contract.
2. The reservation should only be valid for 30 days more (60 days total) by mandating the commencement of design and engineering to be within the next 30 days. Meaning, if an integrator gets a contract and 10% down, then the integrator will have made a major fault if it cannot start the project as determined
3. APS should penalize only the integrator for making false reservations. A certified letter from the PV supplier should be a minimum requirement in order for APS or another regulated utility to pass on penalizing the integrator for causing this hassle. APS and TEP pay a lot of money to run their reservation program with its human needs, and this is wasted if integrators effectively tie up funds for valid solar energy plants by over-reserving for fictitious projects. It is unfathomable to penalize the customer when the entity is really only as smart as its integrator’s advice.
4. A use-it-or-lose-it clause for the different coffers/buckets of incentive money available for residential and non-residential projects….a general renewable energy fund could accept any unused money for projects needing the incentives when the specific bucket is completely depleted. The solar energy sector should be willing to chance that residential solar is a fairly small market and already fulfilled with first adopters owning systems, or if the residential solar energy market proves to be the gorilla in the room, then it should be able to draw funds to ensure adequate incentives for ‘shovel-ready’ work.
5. Limit the system size to 500kW installed per year per customer’s location. If the ACC lets a few companies absorb all the money then you will have many APS/TEP clients who paid their parts for the REST and yet do not get to participate. SRP has managed its program effectively by limiting system sizes to ensure reservations for unrealistic projects do not clog its funding systems.
6. Large-scale solar (greater than 500 kW) must be incentivized from the larger utility-scale renewable energy fund, approximately 70% of all money earned by ratepayer fees. There is no reason why paying customers should be pushed to the sideline because overly optimistic energy developers have reserved monies for unrealistic projects. Some firms have effectively scaled their projects to a utility-scale power plant (greater than 500 kW), and this effectively ties up the incentives for real companies headquartered and operating in Arizona. In effect, the current system limits the ability of 100 kW to 500 kW power plants from going forward with the innuendo that the current incentive process now perpetuates! (90% of companies have roofs that fall within this range)
7. If APS cannot get the utility-scale projects started with third-party developers, then some of these funds should also go into the general renewable energy fund for distributed energy projects (currently 30%) as needed to ensure commercial-scale solar energy needs are completely funded.
8. Reserving money for projects in the past and future Distributed Energy RFPs should not come out of the Commercial-distributed energy budget (15%), but rather the utility-scale side (70%) unless the project is less than 500 kW.
9. APS needs a rate plan for the commercial-scale solar energy plant owner that more closely mimics the cost of energy over the course of the year. The best solution is a Time-Of-Use (TOU) framework that pays more for energy production during the summer months and effectively lowers bills and helps the utilities from suffering losses with third party merchant plants only in business to supply $0.15 or higher kWh during peak demand times. SRP and TEP have very similar models and offer a solid program for solar energy integrators to sell the benefits of nearing net-zero bills.
10. If the ACC opts to continue along the same path as it has by allowing its regulated utilities to confuse local Arizona solar energy businesses, then the solar energy program and local enterprise will suffer. It is time for the ACC to set a level playing field for firms with ‘shovel-ready’ work.

APS could realize serious gains in its solar energy portfolio by actively managing its renewable energy program to accommodate only the shovel-ready projects.

Click to Download the Solar Hawk Energy KISS Method

We will evaluate your bills and recommend the best system for your needs, depending of course on the available space for the installation.

SunPower Website

T-10 Spec Sheet

SunPower Warranty

Calculations and References: http://www.epa.gov/cleanenergy/energy-resources/refs.html

System Size 253 kW at a 10-degree tilt South (Click for Larger Size)

The Environmental offsets are somewhat different than the previous description of these benefits. The reason for the large increase in number of ‘Trees Planted’ and ‘Carbon Neutral Vehicles’ stems from a new source with more credibility than the sources cited initially. The EPA is more credible than American Foressts.org and using the EPA calculation for carbon neutral vehicles is more robust and exact than the calculation I was using before, which was effectively an inference from fueleconomy.gov (run by the EPA).

Note that the utility incentive includes a direct purchase of all of the tangible environmental elements associated with the solar energy plant.  It is not possible  to sell the system’s carbon offsets at the Chicago Carbon Exchange, because the utility owns all these rights. Special conditions exist for firms interested in non-traditional incentives from the utility. SHE is the only firm that can provide you with an unbiased analysis to assist in making your decisions.

Solar Shade Structures with Charging Stations (Click for Larger Image)

Solar Shade Structures (Click for a Larger Image)

Charles Provine founded and is the CEO of  Solar Hawk Energy™. He focuses on the financial structures available to corporations, non-profits, and homeowners who want to integrate solar energy systems. Charles brings together public and private partners to deliver renewable energy technology with the best demand-side management practices available. Charles has a background and experience in a variety of capacities, including solar energy technologies, sustainability sciences, change management, public relations, and information architecture. Charles graduated from Cornell University with a degree in Anthropology. He earned his Masters in Business Administration from Syracuse University and Thunderbird Graduate School of Management. Recently, he completed a certificate program in ASU’s School of Sustainability and earned his LEED-EB certification in December 2008. His long-term goal is to help Arizona achieve its unique opportunity to be a world leader in solar energy technologies.

SunPower 230 Watt Module

“Photovoltaics are best known as a method for generating electric power by using solar cells to convert energy from the sun into electricity. The photovoltaic effect refers to photons of light knocking electrons into a higher state of energy to create electricity. The term photovoltaic denotes the unbiased operating mode of a photodiode in which current through the device is entirely due to the transduced light energy. Virtually all photovoltaic devices are some type of photodiode.”…

Read more at Wikipedia.org

The graph above shows the payoff for a solar energy plant given an electricity cost that starts at 8.5 cents per kWh and increases at the historical rate of 6.57% annually. Incentives help pay a solar energy systems quickly. There are two ways to measure the simple break-even point. Either you break even when at $0 (approximately year 6.5 in this example) or when the cost of electricity without a solar energy plant exceeds the residual cost of the solar energy plant (approximately year 4 in this example).

A Power Purchase Agreement (PPA,) also known as a Solar Services Agreement, is when a third-party financier purchases the system, and the client signs a 10, 15, or 20-year agreement to buy electricity produced from this plant at a set rate with set annual increases; the client does not pay unless the system produces. The PPA price is normally set between 13.5 to 17 cents per kWh with annual escalation of 2%, which is less than historical rate increases. The PPA will not be more financially attractive with the actual grid electricity until about year 10, which is when the higher initial cost and smaller escalation rates break even.  In effect, you are simply changing utilities and the cost of doing business stays nearly the same if not costing more.  If a company is more interested in saving money than spending money for marketing its ‘green’ features, then Solar Hawk Energy™ can help your company make a wise investment in its future operations and improve the valuation of its property.

Solar Hawk Energy™ measures the opportunity cost for doing nothing, calculating as the difference between the cumulative value to the entity at year 25 and the cumulative cost of grid electricity at year 25 (approximately $2.5 million dollars in this example).  This shows the advantage of owning your own solar energy system.  The opportunity cost of pursuing a PPA versus doing nothing is only about $250,000 over 25 years, which is 10 times less than ownership.

Other technologies help reduce electricity demand, and potentially offset purchases from the electric grid, but solar PV technology his a bargain in the long run.  Solar installations have very little impact, almost no O&M concerns, when you have Arizona’s most experienced installation teams doing the work.

From the previous graphs, doing nothing will break even from doing something in about 4 to 5 years.

Mr. Miller’s 25 year career combines strong sales and marketing expertise with a broad spectrum of business experience gained through various management sales positions, marketing and business

development positions. His background is diverse and spans from industrial to financial and also technological industries. Prior to joining Solar Hawk Energy, Mr. Miller was Director of Sales for Connect One Semiconductors, Inc. and was responsible for Sales Channel Development and formation of the

Sales Representative Network for North America. He successfully formed strategic key business partnerships and executed company goals to penetrate targeted tier one level accounts. Richard has also had vast exposure to the sustainable energy markets in the southwest and understands the scope and financial impact of solar energy costs on different business models.

Mr. Miller holds a Bachelor of Arts degree from Lawrence University in 1983 and an MBA from Keller Graduate School of Management.

Overall output varies a maximum of 13% (0º vs. Latitude).  On the other hand, systems elevated 20º to the south only vary 1.7% annually compared to systems at latitude.  A 20º system will produce approximately 3% more energy during the summer peak months (May-October) than one at latitude. The system at latitude will produce approximately 6.8% more electricity than one at 20º during the winter months (November-April). These approximations all assume a constant irradiance and constant derating losses across the systems.

During certain hours of the day and months of the year, our customers use more power. When energy demand is high, power generation systems nearly reach their capacity, and the cost to generate or purchase power increases.

http://www.aps.com/ (Click to Enlange)

Therefore, you can lower your energy bill by spreading out your electricity usage. By doing so, you are charged less, on the average.

The highest average energy use in any 15-minute period during the billing month establishes the kilowatt (kW) demand charge.

Note: The demand also determines how much of the energy you use is charged at the highest kWh rate.

Solar Energy Plants will help a large energy user better manage its summer and winter peak demand as these systems only produce power during the daytime, which is when large energy users (non-residential) tend to draw the greatest (and most costly) amount of energy to run vital systems.

The graphs below used the industry standard ‘PV Watts’ data to show that a horizontal array produces more power than a tilted array during summer hours but also less during the winter months when the sun is lower on the horizon. At your request, we can demonstrate different output trends depending on tilt to the south.

200 kW tilted to South at Latitude (Click to Enlange)

200 kW Installed Flat (Click to Enlarge)

Inverters are typically guaranteed for 18 months, and some others like Sunny Boy inverters have a 10-year standard warranty, an industry leader.

A reputable company will guarantee its workmanship for 5 years fully with the potential to extend this. With the exception of extreme weather conditions, like tornados, solar technology and working will rarely fail except for a very atypical inverter trip from fluctuations in the electric grid.

Large banks of batteries are required, sophisticated integration costs, and less efficient DC to AC conversions are evident with stand-alone systems capable of working when the grid fails. 99.9% of all commercial systems installed globally are grid-tie applications. There are only a handful of 100 kW DC installations in the world for stand-alone operation. Most such installations are for the military or tribal lands without immediate access to grid-supplied power.